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I 


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Encre  de  couleur  (i.e.  autre  que  bleue  ou  noire) 


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Ci-  aocument  est  filme  au  taux  de  reduction  inulque  ci-dessous 


lOx 

14x 

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The  copy  filmed  here  has  been  reproduced  thanks 
to  the  generosity  of: 

Ecolc  polytechnique, 
Univer:,ite  de  Montreal, 
BibI iotheque 

This  title  was  microfilmed  with  the  generous 
permission  of  the  rights  holder: 

Forbes    fdd   Kickdrd 


L'  exemplaire  filme  fut  reproduit  grace  a  la 
generosite  de: 

Ecole  polytechnique, 
Universite  de  Montreal, 
Hibl iotheque 

Ce  titre  a  ete  microfilme  avec  I'aimable  autonsation 
du  detenteur  des  droits: 

Forbes  Tad  Rickard 


The  im-:'"^.s  appearing  here  are  the  best  quality 
possibl     -  nsidering  the  condition  and  legibility  of 
the  origino     ^py  and  in  keeping  with  the  filming 
contract  spe-";ifications. 

Original  copies  in  printed  paper  covers  are  filmed 
beginning  with  the  front  cover  and  ending  on  the 
last  page  with  a  printed  or  illustrated  impression,  or 
the  back  cover  when  appropriate.  All  other  original 
copies  are  filmed  beginning  on  the  first  page  with  a 
printed  or  illustrated  impression,  and  ending  on  the 
last  page  with  a  printed  or  illustrated  impression. 


The  last  recorded  frame  on  each  microfiche  shall 
contain  the  symbol  -^(meaning  "CONTiNUED"),  or 
the  symbol  V  (meaning  "END"),  whichever  applies. 

Maps,  plates,  charts,  etc..  may  be  filmed  at 
different  reduction  ratios.   Those  too  large  to  be 
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ning in  the  upper  left  hand  corner,  left  to  right  and 
top  to  bottom,  as  many  frames  as  rt quired.   The 
following  diagrams  illustrate  the  method: 


Les  images  suivantes  ont  ete  reproduites  avec  le 
plus  grand  soin,  compte  tenu  de  la  condition  et  de 
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avec  les  conditions  du  contrat  de  filmage. 

Les  exemplaires  origmaux  dont  la  couverture  en 
papier  est  imprimee  sont  filmes  en  commenganl 
par  le  premier  plat  et  en  terminant  soit  par  la 
derniere  page  qui  comporte  une  empreinte  d'lm- 
pression  ou  d'lllustration.  soit  par  le  second  plat, 
selon  le  cas.   Tous  les  autres  exemplaires  origm- 
aux sont  filmes  en  commengant  par  la  premiere 
page  qui  comporte  une  empreinte  d'impression  ou 
d'lllustration  et  en  terminant  par  la  derniere  page 
qui  comporte  une  telle  empreinte. 

Un  des  symboles  suivants  apparaitra  sur  la 
derniere  image  de  chaque  microfiche,  selon  le  cas: 
le  symbole  -»  signifie  "A  SUIVRE".  le  symbole  V 
signifie  "FIN". 

Les  cartes,  planches,  tableaux,  etc..  peuvent  etre 
filmes  a  des  taux  de  reduction  differents.   Lorsque 
le  document  est  trop  grand  pour  etre  reproduit  en 
un  seul  cliche,  il  est  filme  a  partir  de  Tangle 
superieur  gauche,  de  gauche  a  droite,  et  de  haut 
en  bas,  en  prenant  le  nombre  d 'images 
necessaire.   Les  diagrammes  suivants  illustrent  la 
methode. 


1 

2 

3 

4 

5 

6 

MICROCOPY    RESOIUTION    TEST    CHART 

ANSI  and  ISO  TEST  CHART  No    7' 


1.0 


I.I 


•  >.    |32 


1^ 

140 


112.5 
2.2 
2.0 

1.8 


1.25 


1.4 


1.6 


^     APPLIED  irvMGE     Inc 

~^S         f^ochcster.   Nrw    torK         M609       USA 


THE   ECONOMICS 
OF  MINING 


/  BY 

T.  A.  HICKARD  H.  C  HOOVER 

W.  R.  INGALLS  R.  GILMAN  BROWN 

And  other  Specialists 


EDITED    BY   i.  A.  RICKARD 


00.  ^  \  2^1 1 


FIRST  EDITION 


1905 


THE    ENGINEERING   AND    MINING    JOURNAL 

505  Pearl  Street,  New  York 
20  Bucklersbury,  London,  E.  C. 


c 
c 

G 

c 


r.irvKH.iir,    igns. 


The  F.Ni^iNti-RiNu  »^< 


MlNISu     IcIUKNAL 


CONTENTS 


PACK. 

Cause;  of  Failure  in  Mining  ( IVrcy  Williams ) 1 

The   Valuation   of    Mines    (.liditorial; ^ 

Ore    Sorting    (Editorial) ^ 

Sorting  at  juhannebburg   ( T.  Lane  Carter) H> 

Cost  of  Shaft   Sinking  by   Hand 15 

Gold  Mining  as  an   Investment    ( iiditorial ) 17 

Mining    kiiks    (Editorial) '-20 

Mining  Methods  at  Johannesburg   (  T.  Lane  Carter) 2VJ 

Notes  on  Zinc  Mining  (W.  Geo.  Waring) '^^ 

Gold  Mine  Accounts    (H.  C.   Hoover) 34 

The    Payment    of    Extensions    of     Mining     Plant    out    of 

Revenue    ( Edward    Walker ) 38 

Ore  Treatment  at  Kalgoorlie   (H.  C.  Hoover) 44 

Gold  Mining  Accounts  (Chas.  V.  Jenkins) SO 

Mine  Valuation  by  Government    (  Editorial) 53 

Cost   per  Ton   as  a    Basis  of   Mine   Valuation    (R.   Gilman 

Brown) ^^ 

Mine  Accounts   (Theo.   3.  Comstock) *>'- 

Ore-Breaking  and  Sorting  on  the  Rand  (H.  S.  Denny) CK 

Mining   Investment    (Editorial) ''7 

A  Card  System  for  Mine  Accounts   (F.  W.  Denton) 80 

Investment   in   Mines    ( Editorial ) 8" 

Gold  Mine  Accounts  (R.  Gilman  Brown) 91 

Card  Systems  for  Mine  Accounts  (Theo.  B.  Comstock) 94 

.Appraising    Futures    (Editorial) 9*^ 

Appraising  the  Value  of   a   Mine 101 

Mining  Costs  at  Cripple  Creek  (J.  R.  Finlay) 103 

Some  Aspects  of  Mining  Finance— I    (Editorial) 110 

Some  Aspects  of  Mining  Finance— II    (Editorial) 115 

Some  .Aspects  of  Mining  Finance— III    (Editorial) 119 

Some  Aspects  of  Mining  Finance— IV   (Editorial) 122 

Some  Aspects  of  Mining  Finance— V    (Editorial) 125 

Mining   Finance 1-" 

Resuing  in  Underground  Work  (F.  C.  Roberts) 131 


IV 


CONTIiMS. 


K.)l)crt>). 


PM'.E 


Mnunfi    and    M.llmg    m    the    M-Javc    IK^.rt    (  Lugu, ^__ 

Co.';;"i:un;zincO;V;nU;;j::plinU.:tncMW.  Spencer     ^^^^^ 
Hutchinson) ■,,■■', )<'•' 

RcMTVcs    ( H.   C     Hoover  I    .    ■^■-  ■■■    ■ jy„ 

K:.pn,en.anaOr.Ke.rve^n.^  ,,, 

Minc  Enn.pmen,  and  "     "  .        Benj'    B.  Lawrence) . .  .     m 

Mine  Equipment  and  Ore-Kt^cr\e>  lotnj.  ^^^^^ 

Another    Aspect   of    ^'''''f  .f!'"^'""  ,,■   Ca.nchy '   to  '  Ore- 
The     Econonuc     Ratio    .-f     1  reatment     Capacty  ^^^ 

Resrrves    (  W     «•    IuR:'"^' o„o 

Mining  in   Rhodesia   (  F.  C.  Roberts) _  ^^^ 

Secret    Re>ervcs    (Editorial) ■ 206 

S.cret   Reserves    (  F.    H.    BathursO      .  -^  •    ■  ■■■■ .^U 

The  Valuation  of  Gold  :^.u:s^(  H^  C  Hoo  c     ^      .^^^^  ^^^ 

Treatment  Capacity  and  Ore-Keser%es  ( i^.  .^.^^ 

Amortization    (  F.    Hobarl)  ■•■•••■  '^ '    , 005 

Valuation  of  Hold  ^;-;;^  ::,^;^:r'rBancroft):  ^  .  227 
Mine  EMuipment  and  Orc-Re^cr^   s   '^        •',„,n,,     to    Ore- 

The    Economic     Ratio    of    1  reatment     Capacit>  ^^^ 

Reserves   (  G    A.   Denny) ;    ■ „. , 

Enu^ment   and   Orc-Re.r.e.-^Ml^dU.r,a,) ^ 

Enuipmen.  and  ore-Reserve.-        f-'^\""     ' -JlO 

Ore-Re.erves  in  Gold  M.m.    (J.   H-  Curk) ._,,^ 

The   Personal  Equation    (  Editorial ) ,^„ 

Ore-Res.rvcs    (H.    C.    Hoover).^..    ..  • ,,,,„ 

No-Liability  Companies   (C.  S.  ";^^^^*^\-^  ,, ; ; . .  .  -jci 

Engineers-  Estimates  of  Costs     W.  «■  '"S?^      o,s 

Gold   Drcdsins  in   Cahfornia    (Cuis.   G.   \ale)....  ^.^ 

Minmg  in  Missouri   ( W.  R.  Ingalls) ,_,,, 

Gold  Dredging  at  Orovillc  (H.  D    bmitn. 


ill' 


il    \'.ilm-    ( 


F.il'i'I'"""'   ■'"'!  t)rc-Ki.-- 


Li-aMiiB  :il  Cni'p 


Crce 


Sicrccy    in    MmitiR    ( F.d 
Mine    \'.ihiation    (  I-^Jito 
Mine   \alii;ition    (  l^     11 
(iravclMimni;    Co^t^    ii 
((.lu-tir    \V.    I'lirin 


The  Cost 


>f  M 


iiiinK   ( 


The  Cost  of  MuiiiiR— I  ( 
The  Co^t  of  Mining  (.1. 
Mine  Rcservfs  (I'.  11. 
The  Cost  of  Min:.iK  ( I' 
The  Cost  of  Mining  (K 
The  Cost  of  Mining  (  F. 
Cost  of  Chlnrlnatiiig  Cri| 


Cost  of  Mi 


(1  M 


He 


by  His  Own   Petar 


Dredging  at  Orovillc   (L.  J. 

The  Cost  of  Mining  ^E  A    F 

Some  Pumping  Data   (R.  Cili 

The  Cost  of  Mining  (James  \ 

The  Co-;!  of  Mining   (  Fditori 

Deep    Mining    (Filitorial) .  . . 

Notes  on  Mine  Reports   (Che 

Mine   Reports    (Editorial)    . . 

The  Interval  hctwccn  Levels 

The  Cost  of  Mining— II  (W.  R.  Ingalls) 


coxT/.xrs.  V 

,,lit..rial) 300 

crves   (C.   S.   Palmer) 302 

k   (J.   K.   Fm'nyt 3il5 

litorial) 309 

rial) : 311 

W.) 313 

1    Alaska    and    Nortluvcsl    Canada 

gton) 317 

;diiorial) 323 

(\V.  R.  Ingalls)..       3'24 

R.  Finlay) 333 

Batluirst) 339 

all ) •■M2 

Brown ) ."MT 

:,) 350 

;  Ore,  (Philip  Argain...  356 

I    Cr.int  I •■«9 

rial) 364 

I) 367 

lys) 37? 

Brown) 378 

■s)        384 

387 

390 

F   Lee) 302 

398 

itorial) 400 

403 


RAYMOND  LEBI.AMC 

C 

PKOFtSSEUR  TlTliLA. 

POLYTtCHNIQU!; 

t 

PREFACE 


TilK  pages  of  this  Dook  furin>li  a  reprint  of  a  r.iimbtr 
of  articles,  bearing  upon  the  cost  of  iiiiniiig,  which  have 
appcarcil  in  i'nt  ICNiiiM.KKiM.  and  M'NiN(i  Joiknai. 
between  January,  1903,  and  June,  11^5,  a  pciiod  of  two 
and  a  lialf  years.  As  affectinj^  the  economic  aspect  of  a 
world-wide  problem,  I  have  included  a  luiinber  of  articles 
dealing  with  thcjse  ethical  and  financial  considerations 
which  are  no  less  important  to  the  industry  than  the 
'Cientitic  principles  underlying  the  actual  breaking  and 
milling  of  ore  at  the  mine.  I-'or  the  editorial  comment  I 
am  responsible;  some  of  it,  in  the  light  of  ampler  evi- 
dence or  maturer  thought,  I  would  like  to  change;  but 
anv  alteration  would  involve  a  recasting  of  t'.ie  material 
tletriniental  to  its  value  as  a  record  of  professional  dis- 
cussion during  the  period  mentioned. 

T.  A.  RirKARP. 

New  York,  June  30,  1905. 


CAUSES  OF   FAILURE   IN   MINING 

(January    31,    1903-) 

To  The  Editor: 

Sir— It  has  been  estimated  that  95  per  cent  of  the  com- 
mercial and  industrial  enterprises  which  are  started  every 
year  ultimately  prove  unprohtable.  Such  business  fail- 
ures are  primarily  due  to  incorrect  estimation  of  the  trade 
conditions  which  obtain  in  every  field  of  commercial  oper- 
ation. These  conditions  are  innumerable,  intricate  and 
constantly  changing,  but  nearly  all  of  them  are  the  result 
of  merciless  competition. 

There  is  relatively  less  competition  in  the  business  of 
mining  the  precious  metals.  Yet  even  with  competition 
largely  eliminated,  I  do  not  believe  that  mining  enterprises 
have  scored  any  less  percentage  of  failures  than  the  purely 
commercial,  w'ith  their  increased  attendant  hazards  of 
endless  competition  constantly  accelerated  and  intensified 
by  cheaper  processes  of  manufacture  and  various  trad- 
combinations. 

In  weighing  these  opposing  conditions  it  would  appear 
as  if  the  investor  in  mining  enterprises  should  have  a 
better  "run  for  his  money"  than  statistics  would  seem  to 
indicate. 

What  are  the  causes  of  unsuccessful  mining? 
There  are  many  causes,  some  of  which  might  be  elimi- 
nated if  the  investor  could  be  slmwn  them.  Nearly  every- 
one has,  at  some  time  or  another,  bought  mining  stock 
or  "taken  a  flyer" ;  yet  how  many  of  those  whose  invest- 
ments have  proven  disastrous  have  re-invested  or  "tried 
again"?  Their  speculative  fever  subsides  after  the  bleed- 
ing. As  a  result,  mining  engineers  are  far  less  busy  than 
they  might  be,  and  die  development  of  the  mineral  re- 
sources of  various  parts  of  our  country  is  thereby  much 
retarded.     A  discussion  of  these  conditions,  their  causes, 


2  THIl  ECO  sum  IC^   ul-  MISIXG 

am!  ihcir  ultimate  cliniinaUuii  woukl  be  timely,  and  it 
might  she  V  many  unsuccessful  investors  the  proper  way 
to  try  again. 

After  a  good  many  years  of  a'-tivity  in  the  mining  and 
metallurgical  field,  I  feel  that  I  can  iiiention  a  few  causes 
of  failure  nf  mining  enterprises  and  suggest  a  few  reme- 
dies. If  liv  writing  this  intrculuctory  letter  and  inviting 
the  consideratitin  of  this  subject  I  can  induce  some  of  my 
fellow-workers  to  grasp  their  pens  and  express  their 
ideas,  I  believe  that  the  investing  public  might  profit  from 
the  discussion. 

I. — St.nrti.no  Wrong. 

Don't  invest  money  on  the  strength  of  a  printed  pros- 
pectus or  the  atlvice  of  an  "interested  friend"  without 
preliminary  investigation  by  a  reliable  engineer. 

Don't  "take  a  t1yer"  in  mining,  but  invest  your  money 
with  the  same  care  and  discretion  ymi  would  use  in  buy- 
ing hank  stocks,  real  estate  or  a  silk  factnrv. 

Don't  trust  altogether  to  luck.  Use  a  little  sound  busi- 
ness sense. 

Don't  invest  in  a  mining  company  that  guarantees 
dividends.     Dame  Nature  has  snniething  to  say  about  that. 

Dnn't  invest  in  a  mining  cnuii)any  that  is  selling  treas- 
nrv  stock  and  pa\ing  di\iden(ls  at  rhe  same  time.  If  the 
mine  is  earning  dividends  the  company  owning  it  seldom 
has  a  legitimate  interest  in  selling  more  stock. 

n. — Txvi-..<Tii;.\Tio.\  AM)  ?^1.\x.\(;f.mf.xt. 

l^nless  you  have  had  stiflicient  experience  as  a  minrng 
engineer  and  nietallnrgist.  and  if  the  amount  of  your  con- 
templated investnieiU  is  consii'.eraliK  ,  einijlov  a  relialile. 
exjierienced  engineer  to  report  on  the  property.  Don  t 
dc-i  this  vourself  unless  you  are  born  eternally  lucky. 
IZverv  ni;ni  to  his  trade. 

Once  vou  have   inve-ted   in   a  mining  enterpris<\   insist 


C.  I  USES  OP  I-\ULURB  IX  M/XIXG  3 

on  frequent  and  complttc  reports  coverinfj;  operations  of 
the  mine.    Employ  a  comi)etent  superintendent. 

Don't  take  your  son  or  your  nephew  or  your  clerk  out 
of  your  store  or  business  house  and  send  him  to  Arizona 
or  Colorado  to  "run  thintjs"  for  you  at  the  mine.  Sell 
out  first. 

Once  you  are  as.sured  of  their  qualiiica:ions,  put  every 
reasonable  confidence  in  your  manajjer  and  superinten- 
dent. Give  them  a  fair  show  to  make  a  dividend  payer 
of  your  mininp  investment. 

If  you  are  a  director  in  a  mining  company,  do  not  force 
the  manai^er  or  superintendent  to  find  a  job  for  all  of 
your  unsuccessful  friends  and  relatives.  Let  him  hire 
his  own  men.  Don't  convert  your  mining  property  into 
an  asylum  for  ne'er-do-wells. 

III. — OrER.MiQN  OF  Mixes. 

Don't  spend  all  of  your  capital  on  top  of  the  ground. 
Do  some  digging.  Don't  buy  too  much  territory.  Mining 
claims  ;irc  cheap.  Con  cut  rate  your  operations  and  your 
capital  at  the  points  where  your  orebodies  have  been 
found.  .Additional  surface  territory  means  nothing  unless 
it  contains  ore. 

Don't  expect  your  ore  to  grow  richer  with  depth.  It 
may  gain  in  quantity,  but  seldom  in  quality. 

Don't  Imild  a  mill  or  a  smelter  or  reduction  works  until 
you  are  certain  ymi  have  enough  ore  available  to  keep 
tlu'  mill  in  ^^teady  operation  until  at  least  its  initial  cost  is 
recoverrd,  Tliis  advice  is  ancient  and  worn  from  constant 
reyictitinn,  \et  there  are  iniumieralile  mills  and  smelters 
dntting  niir  Western  landscapes  to-day  which  hardlv 
turned  a  wheel  because  the  supply  of  ore  was  insufficient 
or  unsuitable. 

Don't  build  your  reduction  works  until  you  have  as- 
sured vfiur.-^clf  lieyond  all  doubt  as  to  uhat  kind  of  a  jiro- 
ccss  your  ore  re(|iiires  to  yield  np  its  values.     "N'mi  can 


4  THIl  ECOXOMICS  Of  MIMMi 

adapt  the  mill  to  the   rcquirciiK-nts  of  the  (^re,  hut   you 

cannot  manufactuic  an  ore  to  run  throuKb  any  particular 

mill  or  smelter.     Spend  time  and  money  m  hndms  nut, 

fir.t  what  process  is  peculiarly  adapted  to  ycnir  or-,  then 

you  will  leave  behind  you  no  silent  endurni-  monument 

to  foUv.     Employ  a  competent,  experienced  metallurgist 

to  practically  test  your  ores  hefore  huildint;  a  mill.     -Most 

any  process  xvork^  all  ri^dn  on  most  any  ore  in  a  chemical 

lahoratorv,  hut  in  actual  work  on  a  commercial  scale  there 

are  other  conditi.ms  to  contend   with.     It  is  well  to  tmd 

,nit  what  these  conditions  are  hefore  spending  m<iney  on 

reduction  works. 

I  realize  that  the  sugsestions  I  have  made  and  the  rem- 
edies 1  have  advanced  with  a  vi.nv  to  insuring  greater 
safety  in  mining  investments,  are  ridiculously  simple  and 
self-evident  to  the  veri.st  tenderfoot;  but  this  being  the 
case  I  will  leave  it  to  some.me  else  to  slate  why  business 
men  continue  vear  after  year  to  make  the  same  mistakes 
in  their  mining  investments  instead  of  proceeding  along 
these  lines  of  greater  sofetx.  They  do  uot  seem  to  learn 
bv  experience.' T.'/!V— I  do  not  know.  However,  I  would 
'ike  to  sec  these  gentlemen  have  a  better  "run  for  their 

money."    Can  we  not  help  them? 

Percy  Willi.nms. 

Prescott,  Arizona,  January  6,  1903. 


THE  VALUATION   OF  MINES 

(Editorial.  January   31,    ly   j) 

In  this  issue  a  correspondent  brings  forward  a  per- 
tinent qucrv  concerning  the  unprotitable  result  of  a  large 
per:entage  of  mining  investineius.  It  is  a  broad  (jiies- 
tion,  wiiicli  niav  be  answered  humorously,  cynically  or 
>ti.iightfor\vardlv.  aci  Tding  to  the  mood  of  the  person 
interrogated.  We  can  only  reply  in  all  seriousness,  for 
it  is  a  subject  fundamental  t.i  the  mining  industry.  Our 
correspondent  gives  a  number  of  indubitable  causes  for 
failure,  but  we  think  he  has  omitted  the  most  important 
of  them  all.    We  refer  to  the  over-valuation  of  mines. 

In  order  to  discuss  the  matter  profitably  it  is  neces- 
sary to  take  the  simplest  case  of  all,  a  valuable  gold 
mine.  Eliminate  from  the  incpury  the  undeveloped 
mines  and  prospects;  disregard,  for  the  moment,  the 
essential  uncertainty  of  all  the  occurrences  of  ore  in 
nature  and  the  difficulty  of  estimating  the  quantity  avail- 
able:  restrict  the  scope  of  the  investigation  so  as  to  avoid 
the  complications  due  to  varying  metal  markets — so  potent 
tor  good  and  ill  in  the  mining  of  the  baser  metals:  take 
it  for  granted  that  you  are  dealing  with  a  known  valuable 
deposit  of  gold  ore  which  can  be  jirofitably  worked  under 
the  gi\en  conilit'ons  of  time  and  place,  and  then  ask; 
What  can  make  ii  the  basis  of  a  losing  investment? 

The  answer  can  include  causes  as  numerous  as  the 
many  vagaries  of  human  nature,  but  the  principal  source 
of  trouble  arises,  we  believe,  from  over-valuation.  The 
appraisement  of  mines  has  undergone  striking  develop- 
ment during  recent  years  and  it  merits  fuller  discussion 
than  the  present  occasion  will  permit.  A  mine  may  be 
said  to  be  worth  a  given  sum  when  it  can  return  that 


6 


rilE  ECOXOMICS  01-  MIXI 


sum  as  profit  from  operations  covcriuj;  a  term  of  years, 
plus  the  interest  on  the  investment  chuing  tiie  period 
consumed  in  the  return  of  the  stated  price.  Wlien  this 
is  translated  into  a  share  capital  tlie  condition"--  are  the 
same,  aUhoDKh  the  amount  of  interest  whicli  should  be 
returned  in  tiie  form  uf  dividends  will  vary  in  percentage 
according  to  the  lia/.ard  of  ditYerent  kinds  of  mining. 

Apart  from  specific  causes,  there  are  several  general 
iiuluenccs  which  militate  against  true  values,  'i'here  is 
that  expectation  of  better  things,  that  resolute  hojieful- 
ness  which  is  necessary  to  all  exploratory  work.  We 
cannot  do  without  it,  hut  it  slioidd  be  so  restrained  as  to 
regard  the  rules  of  arithmetic.  It  is  natural  to  the  owner, 
to  the  manager,  to  the  intending  purchaser,  to  all  the 
persons  to  whom  the  success  of  the  mine  ministers,  di- 
rectlv  or  indirectly;  therefore,  all  the  more  reason  for 
taking  care  that  the  valuation  of  the  mine  be  iiUrusted 
to  those  whose  judgment  is  in  no  wise  vitiated  either 
bv  sanguine  sentiment  or  that  disturbing  influence  which 
is  covered  by  the  term  participation.  To  sunmiarizc, 
mines  are  often  over-valued  bee.iuse  the  valuation  is 
usually  done  by  people  who  are  interested  in  getting  a 
maximum  ap]iraisement. 

There  is  another  far-reaching  factor;  m  nes  are  fre- 
quently I)0Ught  to  sell.  It  i<  a  cynical  truth  that  more 
money  is  made  by  selling  mines  than  by  buying  them — 
because  tliev  are  so  often  sold  for  more  than  they  are 
worth.  Therefore  it  happens  that  althmigh  a  property 
niav  be  recognized  as  worth  a  stated  sum,  nevertheless 
shrewd  persons  will  be  willing  to  pay  a  larger  amount 
because  thev  Iiavc  a  reasonable  expectation  of  selling 
it  subsequent] V  for  still  more.  If  this  is  brought  alwut  by 
further  intelligent  development,  by  solving  knotty  prob- 
Ictus  of  ore  treatment,  by  a  new  equipment  which  minim- 
izes working  costs,  that  is,  by  engineering  talent  nf  the 
best  kind,  then  assuredly  the  enhancement  in  price  is  both 


TUB  VALUATIOX  OF  MIXES  7 

warranted  ami  (k-sirvcd :  hut  wluii  it  merely  presumes 
upon  the  i<,Miorance  of  imlividuals  <ir  of  shareholders  it 
partakes  of  the  practices  which  slide  imperceptibly  into 
acts  that  are  di-honest. 

The  result  of  thcsr  tendencies  is  that  it  is  hard  to  pur- 
chase mines  at  a  fair  valuation — that  is.  we  repeat,  a 
valuation  such  as  is  likely  to  ^'ive  a  return  of  the  pur- 
chase price,  plus  a  reasonable  interes.  on  the  capital  in- 
vested. The  supplv  of  fjood  n^ines  is  far  below  the  de- 
mand; in  addition  to  those  who  are  shrewd  enouf:;h  to 
recnsTuize  that  ^old  niininjj.  if  properly  safeguarded,  is 
the  safest  industry  extant,  there  arc  ?  larfjer  number  who 
see  the  advantaf^e  of  tradin.LT  upon  the  sanguine  tempera- 
ni.nt  of  human  kind,  and  there  is  also  annther  class  of 
people  who  rush  in  where  experienced  men  fear  to  com- 
mit themselves.  Thus,  if  a  mine  is  worth  a  certain  sum. 
as  nearly  as  tlie  fact  can  be  determined  by  skillful  and 
trained  sjiecialists.  then  the  iirst  cjroup  described  will  pay 
that  nuich  for  it.  while  the  second  will  pay  more  accord- 
in.f,'-  to  the  jiiipularity  of  the  locality  and  the  attractive- 
ness (if  the  scheme,  and  the  third  .croup,  of  innocents, 
will  be  deluded  into  par.insj  with  a  price  wliich,  humanly 
speakinf^.  promises  a  loss  with  deadly  certainty. 

These  are  some  of  the  reasons  why  miiiinp  ventures 
prove  unprofitable;  they  are  such  as  time  alone  can  re- 
move— time  and  the  education  of  the  public  to  a  realiza- 
tion of  the  fact  that  while  no  industry  affords  such  rapid 
and  remunerative  returns  as  legitimate  mining,  none 
atifords  so  readily  the  facilis  descensus  .-iiTriio  which 
awaits  the  greedy  or  the  foolish  in  the  financial  arena. 


ORE   SORTING 

i  KilitiTial.    1  Ltiruary    ;.    lyuj) 

Tilt'  article  on  ore  ^ortiti;,'  uhicli  \vc  i)ubli>li  in  this 
issue  deals  with  a  subject  ul  very  practical  importaticc. 
Ignorance  concerning  the  proper  ])roportion  of  poor  rock 
whicl;  il  is  desirable  to  take  out  oi  the  veinstuff  has 
made  failures  of  good  enterprises,  and  the  overK)oking 
of  this  factor  in  luining  has  been  at  the  bottom  of  many 
inexplicable  over-valuations  of  property.  Whether  to 
sort  or  not,  is  a  (jueslioii  vital  to  the  eco.A)iiucs  of  a 
mine;  it  may  mean  the  choice  between  a  small  yield  of 
high-grade  material  or  a  large  output  of  low-grade,  an 
alternative  which  immediately  affects  all  the  operations 
carried  on  at  the  surface,  as  well  as  underground.  In 
regard  to  estimates  of  the  future  production  of  a  mine,  it  is 
not  too  much  to  say  that  the  tonnage  taken  out  of  the 
workings  is  nearly  always  greater  than  that  calculated, 
because  it  is  found  by  experience  that  such  estimates, 
based  as  they  are  on  a  few  regular  stopes,  are  likely  to 
be  pitched  too  low  as  regards  tonnage  and  too  high  as 
regards  assay-values;  therefore,  the  stojiiiig  wid''  -  which 
are  determined  by  actual  measurement  should  ha\e  added 
to  them  an  allowance  for  breakages  of  rock  from  the 
walls  of  the  lode  and  the  accidental  inclusion  of  waste  in 
other  ways. 

The  best  place  to  do  your  sorting  is  at  the  working 
face,  if  you  can;  this  is  t(j  be  done,  either  by  judicious 
blasting,  wliich  removes  the  maximum  of  clean  ore  and 
the  mimnnim  of  wall-rock,  or  by  eliminating  the  large 
pieces  of  waste  which  are  always  serviceable  for  loading 
the  stulls.  .Ml  sortini;  at  surface  is  made  more  ditticult 
by  the  mixing  which  the  particles  of  ore  and  waste  under- 
go in  subsequent  handling,  either  while  being  b  mailed  into 


ORE  SORTIXG 


9 


tlif  cars  or  (hunp(.'<l  into  tlic  orr  lionsc,  Tlic  Cornishiiian 
wlio  rcMus,'  tlial  i>.  stri])s  tin-  lode  by  .shootintj  duwn 
tlic  adjoining  wa^^tc-rock  pnvious  to  breaking  down  liis 
ore.  M'paratilv  and  i-kaii.  jirfsfnts  one  extrenif  ot  llu' 
methods  possible  under.irroiind  :  while  the  man  who  need- 
lessly blasts  a  narrcnv  and  clean  streak  of  liiL;h-,i,"  'i-'  ore 
ioL,'ether  with  several  feet  of  adjoinin;;  barren  ■.  mitry. 
Miily  to  give  emii'oynient  to  a  nmnber  of  men  at  snr- 
face  who  separate  what  could  have  been  kept  apart  in  the 
slope,  illustr.ites  the  other  ■.xtreme.  It  is  not  a  mathema- 
tical or  >cientitic  (|uestii>n,  and  on  that  account  it  is  insuf- 
ticientlv  appreciated,  but.  like  many  other  problems  aris- 
ing in  dailv  work,  it  demands  that  fundameiual  science 
which  lluxlev  defined  as  organized  common  sense. 


SORTING  AT  JOHANNESBURG 

i;v   1  .  Lam.  (.  akii  k. 

(  I  iliriMrv    7.     I').  .1   I 

riic  (|ucj.tiiiii  of  r.iiMiiK  lli«-'  j^radi'  <>\  the  ore  by  surliny 
'lUt  tlie  Uarriii  (|uart/iti'  is  >>uu  that  lias  icciuihI  ^rcal  al- 
tciitinii  on  the  Witwalcr.-raiul,  so  tlial  a  wi-ll-c<iuipi)<..l  sort- 
iiis^  house  i:>  now  looked  upon  as  one  of  the  nece»ary 
leaiures  of  a  complete  plant.  Sorting'  by  hand  i.-,  tin- 
method  pursued,  it  bemj,'  out  of  the  (lue^tion  to  use  >ueh 
eoiitrivanees  as  jif^^s  for  this  i)urpo>e. 

I'lirmerlv,  the  waste  rock  was  con>idered  (juite  barren, 
and  therefore  of  no  value.  A  different  opinion  prevails 
now.  It  has  been  the  custom,  ot  course,  to  take  samples 
of  the  rock  which  is  thrown  out.  but  such  samiilin^'  is 
almost  n>eless  for  practical  luirjiosos.  It  '.■-.  in  fact,  im- 
possible to  determine  in  the  ordinary  way  how  much  the 
waste  rock  is  worth,  for  it  consi.^ts  of  piece>  ran,t,Hn<j;  from 
I  he  size  of  an  c.^l;  up  to  1,0  or  4()poim<ls.  One  method  is  t' 
take  a  hamlful  from  each  carload  of  wa>te  liefore  it  is 
sent  to  the  dump,  and  throw  thi-  sample  into  a  Ixix. 
W  hen  the  box  i>  full  the  man  in  chari;e  of  the  .sorting 
plant  takes  a  sample  of  a  few  iHumds  in  weight,  and  sends 
it  to  the  assay  office  to  be  assayed. 

Now,  it  is  curious  how  the  value  of  this  sample  varies, 
accordintj  to  the  man  who  is  responsible  for  it.  It  is  pos- 
sible to  obtain  :i  reliable  return  from  the  assayer  if  the 
rock  is  iirojjcrlv  crushed  and  (piartered.  but  the  (|ue.-^tion 
is:  Does  this  sample  pve  a  true  indication  of  the  value  of 
the  rock  which  tjoes  over  the  dump  .•' 

The  only  iM.ssible  way  of  ijettinL:  at  the  value  of  the 
waste  is  to  cru-li  everythin.L;  to  a  uniform  small  size,  and 
then  quarter  down  carefully.  This  is  a  cumbersome  oper- 
ation, and  i.^  not   practicable.     The  writer  has  known  of 


SORTfXG  .IT  JOn.lXMSIil'Rh 


11 


cases  u 


lure  an  assa\  of  tlic  waste,  wliicli  was  put  down 


as  4\  <h\t.,  liad  a  rtd  ink  liiu-  drawn  tlirungli  it 


luuli 


HI  a\itlMri;\'.  w 


lor  tn 


to  lie 


liave  luen  wron^. 


Ii\  tiitise 

illi  the  i< mark  that  "it  was  ini|i(i-Mhk' 

sii  rieli."   and  that   "the  sainjile  inu>t 

I'.ut   it  is  just  jMissihle  tliat  in  snnie 


cases  siuli  a  hii^li  vahie  was  actually  in  the  rock  (  'n  hik' 
mine,  known  to  tile  w  ritei .  liie  in.iM,i^;eineiU  took  the  latter 
view,  and  let  out  a  contract  to  an  experienced  man  to  re- 
sort tlie  whole  dump.     'I  he  contractor  was  ^dven  alioiu  $4 


jr  ti 'U  lor  e\\r\'  tc m  o 


f  cleai 


■hi 


ed  out,  am 


a  surjirisc  how   main-  tons  of  ])ay-ore  were  olit;iinei 


1  it 
1. 


A  rather  pr.actical  test  is 


trieil  on  two  of  the  hi^ 


i'Vi.r\  thiiij 

cept.  <  if  C' 


that 


o  attempt   is  m:ii 


fe  t. 


irt 


It  the  waste: 


L's  from  the  mine  Ljoes  to  the  null,  ex- 


irse,  tlu'  rock  from  en 


cut- 


le  value  per 


'11  crushed  has  falKii,  hut  the  ni;ni;iL;eineiit  helieves  that 


under  the  I. 


ircunistances  more  jirotit 


de  1 


i\    not 


irtiiiL 


Tl 


le  w.av 


the 


ik  at  it  is  t 


his  :  A  calculation  is 


de  of  tlu'  cost    of  handliiiLr   the   ore   after   leaviii.iL:  tin 


s' 'ituiL;  tahle : 
.•iiid  lioisti'd  t 


sup])ose  it  is  detiTtninei 


1  that  havintr  mined 


le  ore 


.and  hrouuht  it  to  the  mill  it  p;ivs  to 


al 


crush  aintliiUL:   over    i.ii 


dwt. 


d   th 


stcdi 


Iwt. 


hen  it  is  hetter  to 


run  tliroUL;h  this  J,\  dwt    stuff, 
even  if  onlv   1   shilliui,'  ])er  ten  ])idth  is  made,  rather  than 


han,^  up  a 


'iiher  of  stamiis  for  lack  of 


It  is  not  held  that  sortiu!:,'-  does  not  pay.  hut  under  some 
conditions  it  nii,i.;ht  he  preferahle  not  to  sort.  Take,  for 
instance,  a  hattery  of  200  stamps.  On  account  of  the 
scarcitv  of  lahor.  onlv  ahout   To  of  these   stamps  can   he 


su 


pplied  with  sorted  ore  at  the  iiresent  ti 


l'ii(kr  thesi. 


conditions   it   is  advisahle   to  put   throiiLrh   every   ton   ot 
material  on  which  even  a  small  ])rotit  can  he  made. 

To   put   the  matter   in  a  nutshell,  the  manasjers  make 
profits  the  has 


>f 


ore  cms 


is  of  calculation .  rather  than  yield  per  ton 
•hed.     If  lahor  were  plentiful,  and  a  mine  with 


200  st;nnps  had  a  -'iperahundancc  of  ore.  the  hetter  policy 


in 


7//:  licoxoMics  or  \ii.\ixa 


would  lie  to  r;ii--t'  ilii  L;iaili  a>-  iinuli  a-.  ]iii-'-ilili',  even  it 
by  >.(i  dciiiii,'  till'  (luiii[)  a»a\i(l  ratluT  lii);li.  Hut  it  wtll  In.- 
niau\  nii'iitlis  l)i.inro  a  niiiic  \\itli  jno  >tanii)s  will  have  a 
su]Hraliiinilauri'  ni  (ire  t'T  tlu'  uiill. 

I  In  inilui>iasts  <im  sintiuj^  Idnk  ratlur  askance  at  ahaii- 
cl(>nnu'iit  iif  siirtini;,  hut  it  is  an  i'\]utiuirnt,  and  as  -.iii-h 
is  iiitiTestiiiLr.  It  will  he  iK.iiii'd  that  _' ',  ilwt.  wa>  ]nit 
down  as  thi'  \ahu'  ni  the  wa-ir  rnck.  'I  hi>  niiL;ht  -iiiu 
hif^li.  hut  (in  sunk'  niini,'^  it  i^  tlu-  ri'iTrct  \alui-.  An  in- 
vcstij^atiitn  has  slmuii  tlu'  iau-.r  hI  it.  Tlu'  (|tiart/iti'  ci'tui- 
iry  is  harrcn,  it'  ^anipU'd  a  Idnt  \riu\  thr  iwi  it  \iin.  hut 
sometimes  in  tin  imiuidiatc  neiuhh' Thdiul  of  the  reefs 
careful  sami)lint:  will  ~liow  that  the  MipposedlN  harren 
rock  carries  i;old.  as^axin;^'  in  laie  case  a>.  hi;:;h  as  i  oz.  per 
;on.  'i'he  underj;roimd  manat^er  of  one  of  the  Rand 
mines  told  nie  that  in  his  mine  there  wa-  a  tin\  jnrite 
-cam,  ^oiiie  di>taiice  from  the  regular  lea<ler,  which  as- 
sayed 5  o;^.  to  tlu  Ion.  Ill  the  orilinary  course  of  e\'eiils 
this  cotmtrv  rock  w.iuld  he  thrown  out. 

'idle  fore^iiins,'  must  not  he  taken  as  dispara^ini;  the 
scheme  of  sortini;.  for  there  i>  no  douh;  that  sortinu;,  if 
carefully  walcluil.  and  done  liy  ^killed  men.  can  pla\  a 
still  preater  part  in  the  future  of  the  Rand  than  it  has 
done  in  the  past.  Like  ever\ihinL;  else,  however,  it  needs 
careful  watchini:;:  if  it  is  not  doue  properh'.  an  actual  loss 
niiL;ht  iie  the  result.  ;i~  has  heeii  alre;id\  indicated. 

In  the  future  it  is  possilile  that  hetter  sorters  than 
Kaffirs  will  he  employed.  .\n  earnest  attempt  will  he 
made  to  s^et  at  the  acttial  value  of  the  waste  rock,  either 
hy  occasional  trials  in  the  mil!  or  h\  careful  sampliiiL::. 

(  )n  some  mines  an  attempt  at  rouj;h  sortins.;;  is  tnade 
underLTround.  the  lartjer  pieces  of  waste  hein;,'-  put  in  ])ack 
walls.  In  the  >oriin^'  Imuscs  one  of  two  schemes  is 
adopted,  h'.ither  ;m  endless  belt,  such  as  the  Robins  belt- 
conveyor,  mo\is  ]ias'  the  sorters,  who  throw  out  the 
waste,  or  a  revolving;  t.ahk',  rin,<j;- shaped,  about  ,^5  to  40  ft 


.SV>A'//.V(,   .//    Joil.l.WESBURG 
in  (lianictcr.  willi  a  inripluTv  5^  in  it  ft    wn 


13 


U'  M  'Ti- 


ers tlirou  li 


aste  into  l)ins  hclnw  tlu'  i; 


Tl 
\\  aiir  tor 


uasliinij  tlic  oil'  is.  of  cnurse,  ust<l  iiKiitiiullv 


It  may  l)c  nf  iiittrist  to  j^ivo  an  ixainplr  ni   Imw   the 


question  of  sortin;;  attut^  tlic  wiliiat 


1>  ill   n|    a 


(it  mo 


in  tlic  mine.     Sii 


pP'iM-  w  c  havi'  a  hlnc 


k  of  K'rounil  ,J,o<)  ft. 


loii^'  l)y    120   ft.  on   tllc   (lip  1 
f( 


.f  tlic  nvi.     It 


Is  (l(."-tr(.( 


1  t( 


orm  an  ostminto  ni   the  mmilxr  <it  ion- 


the  valiK' 


iircad  (tut  ami  ih(.- 


per  ton  in  this  block.    I  he  a.s.say-plan  i> 

assavs  taken,  as  tlicy  are  maiki:l.  all  aroinid  tlie  per 


ter  o 


1  tlic  block.     (  Ml  the  .assav -plans  01   main    niiiK:-  the 


assa\'  \altH'  o 


f  the  .seams  of  ijnIil-heariiiL;  mater 


lal  am 


1  th 


a(hl 


1  111  llK'hes  are  h 


raekdeil  thn- 


I  5  in.  .'It  |()  (1\\  t. 
4  in.  at  ~^  (lut. 


All  these  values  are  taken  ddun  aii'l  the  averat^e  fmiml. 
Suppose  the  result  comes  out  thus: 
20  in.  at  to  (Kvt. 
<■'  in.  at  (>o  (hvt., 
which  we  call  jo  in.  at  jS  dwt.,  the  ;i\er;!!:c  vahie  of  the 


'1  ne  stopini;  width  c;in.  for  example,  he  assnnied  as  42 
in.  Since  we  lia\e  j6  in.  at  jX  dwt.,  then  for  a  width  of 
4J  in.  wc  have  4J  in.  at  17..^  ilwt.  To  find  the  numher  of 
tons  in  the  block 


300  X  120  X  3.5 
13 


=9,692  tons ;  9.692  X  17.3=  16-.671  (hvt, 


the  sold  contents  of  the  block." 

\\"e  will   assmne  that   35   per  cent  of   the  ore   will   hi 
hrok-en  .'IS  unsortal)le  tines,  and  tliat   20  i)er  cent   will  b' 


so 


i.0.?8 
0.f)Q2 


rted  out.     The  bli>ck  can  tlun  he  valued  as  fo 


fines 


.]«!. 


=        58.(^.85  (  I  ) 

=       j.r)07  ( 2 ) 

—  iry>.o70  (,,?» 

=  i6;.(.7i 

*  Tlir  fiiture   1.1  is  assitmerl  .is  the  mimtier   nf   cvit'ic    feet   of   nro    in  place 
e<itiivalcnt  to  r^nc  tnn. — KHitor. 


tons 
tons 
tons 


14 


THE  ECOSOMICS  01-  MIMXG 


r>y  oimhinin:,^  (  i  )  and  (3)  \vi  can  rtcknn  tliat  tmin 
thi>  l)l(n.k  nt  yrduml  tliirc  will  he  scm  ti>  ihc  null  7.754 
tons  at  21.2  (hvt. 

Xotifc  tliat  the  waste  rock  is  nut  cnnsidereil  Iiarrcn. 
but  is  put  down  at  lA  dwt.,  which  is  a  normal  value. 


COST  OF  SHAFT  SINKING  BY   HAND 


(I'lliruary   -■;<,    i9uj.) 

Mr.  Ivhvard  H.  IJcnjaniiii  contrihutts  to  the  Pacific 
C(hist  MnuT  an  iiiti.Tt'>tinu;  stateiiicnt  rcsjjardin^'  thu  cost 
of  shaft  sinkini;  by  liaiul  in  Cahfortiia.  The  table  l^elow 
^ives  the  record  of  wnrk  in  the  last  130  ft.  of  the  vertical 
>haft  at  the  ( idjden   |-".aL;le  nnn 


the  i^rcperty  u 


f  the  L; 


issen 


La^^en  (, oinily, 
Miiiin,!.^  (.'niniiany. 


C'al.— 


Mine 


Shi  IN 


l'n< 


TotnU 


(<,). 


TippuKMi    (J) <M      J-Soprs 


4J,^    $.vooi)'r  s'ft.    $i.J(x)0O  $8  4(10 


ft. 


-•.i5oo 


i.^oo 


■.iij.;meers 


(-'I. 

I'.l.n-kNiir.tb    (i). 
l-'nrfinan    (I  )  .  . . 


y4      .voo  ])  r  s  tt. 
3.50  i)'r  s'ft. 
100  ])'r  ino. 


28J.M  l..S,So 
1(14.50  l.o<;() 
i;j.3o      1. 149 


Total 


$j.irj.8o  $14,151 


TimI 
1. 


KT 


iKk'lllg 


l^iiiuig  lioarcis 

Cordwood    (lilockiiig  ) . 
Wedges    


•  ■  ■   705 

Quantity. 

lo.or^ft.  $13  per  M.      $14-'/)')    $o.<)5i 

j.5-'oft.  .^5c,  a  pii'cc  MS  JO       o  ^S8 

j.j;oft.  $14  per  .M. 
5  cords  $3  JKT  C'lrd 

3.000  ic.  a  piece 


.V 


.78 


1500         01  IK) 
3000         0.200 


Total  timber. 


Wood   ( fiR-n 25  cords  $3  per  cord 

(  111  aiiil   incideiUals 


Total  puwer  cost. 


Coal 


$.t.l5 


Candles    0  cases  $0.40  case 


Total  ilhiniiiiat 
Powder   . 

Fuse    

Caps    


fioo  11).   14c.  per 


$.V)7.''7    $-'.051 
$75.00    $0500 


$90.00    $0.(100 

$24.1)0      $05(10 


,if^40 


5(> 


500  ft.    $3.70  per  M. 


$(13.30    $0  422 
$84.00    $o.5('io 


9-5 


0t)()I 


550 


625  per  .M.       3.44      0  02  5 


Total 


explosives. 


$96.(K)     $0,044 
$2.(180.4(1  $17,808 


Total  cost  of   150  fcit  of  shaft 

-Mr.   r.eiiiamin  adds  the   f(  >llii\\  iiiij  dct.ails  :  "W'drk 


wa.s 


ci'iiinien.-eil  ai  a  piiiiit  7  ft.   heli'W    the  4ik)  levtl  and  the 
shaft  was  smik  i  ;o  ft.  helnw   th.at  imint.     The  wnrk  '.vas 


16 


I  III-:  lA  uxoMii  s  oi-  Mi.\  i.\(, 


(IniK-  by  liaml  drilliiiL;.  \vi  .rkiiit,'  llircc  S-limir  vliifts, 
wiili  thrt'c  nun  on  ;;  -liii't.  I  lu'  s^r'ntml  \\a>  taken  (lul 
7  l)v  ij  I't.  ill  liir  ckar — fur  a  ilinihk-foniiJartnKiit  shaft. 
1  Idistiiit;  \\a>  ilmu'  with  a  bucket.  The  cimiitry  rock  was 
hard  aink'^itc,  .\'i  waicr  \\a>  iiiii  innlcreii.  I  he  shaft 
was  tiinhered  will:  lo  1)\  lo-iii.  sawed  timbers,  end-platcs 
and  eetitrediraees  .Inwtailed  in.  and  eentie  and  enrner 
]i<)sts  gained  in.  The  sets  weri-  pkieed  5  ft.  between  cen- 
tres, tilled  .ind  lauded  sdlid  bchnid  timbers  .and  each  cmih- 
liartinent  was  lined  with  1  by  ij-in.  linin-  boards  set  3 
in.  apart,  llu-  wurk  was  CMmpleted.  in  47  sJiifts.  makiiiu'' 
an  average  i>f  _^._>  ft.  ]  r  -hift,  lini^tinL^  Jo  tcms  of  material 
prr  >hift.  be-ides  pnlt^'e^'  in  timber-,  '1  lie  timber.-  were 
framed  liy  liaiid  b\  ''•  toreman,  who  directed  tlie  work, 
i'.iulileeii  holes  were  >..-ilKd  for  each  round.  Xo.  J  Ciiant 
piiwder  was  nseil.  'The  ^ronnd  drilled  hard,  but  broke 
well.  I'he  out>ide  huK'S  were  keiit  Iiiyh  and  the  centre 
broke  t'lrst.  1  dio  not  know  of  anv  work  dt)ne  by  liaiid 
where  a  lutter  reo^rd  has  luen  made." 


GOLD  MINING  AS  AN   INVESTMENT 


(K.liturml,    March   ;i.    i9'i3) 


We  iintc  tiiat  our  London  contemporary.   The  Econn- 


»ust.    wliic 


oiirnaliMn. 


li    rei 
h 


iresents    the    bc~t    tradititjns   of   financial 


fnii^lied   tl 


publication   ot   a   series   (j 


l)V     1 


ts   "Sju'cial    Mining   Conunissioner,"   under 
ze<i  the  trenciiant  stvle 


articles 

wliich  title  wi'  have  easily  reC(.ij;ni 
and   fearless   expres>i()n   of  opinions   which   characterize 
our  friend.  Mr.  J.  il.  Curie.  'Ilie  concluding  article  of  tliis 

he   found   on   another 


series, 


111  a 


l)M 


ract   oi   wliicli   uil 


page.  uiiuU  up  with  a  few  home  truth>  and  that  under- 


current of  depre; 


itr  f'"anki!css  which  we  have  learned 


to  associate  \\i 


th   Mr.  Curie's  writings. 


The  burden  of  these  recent  contributions  to  the  pages 
of  'lilt-  liioiioinist  has  been:  Cold  niiius  are,  witli  rare 
except  il 
the  ri>k  and  are 


ins.  nnicli  o\ervaliiei 


liareiiohlers  do 


not  realize 
atished  with  a  rate  of  interest  which 


is  too  small,  considering  that  risk;  thes   are  careless  re- 


rardiiu 


(liiestions  o 


f  ore   re> 


bv    over-rating   their    mine.' 


erves ; 
and,    i 


th 


nd 


inevitablv 


conscfiuence. 


tl 


lev 


.'culate  foolisl 


iiv. 


.\ 


s  a  coro 


It     IS    >UgL 


Mr.  Curie  that  a  certain  rate  of  divii 


(lend. 


sted   b 


a  certain  pro- 


portion ot  (jre  reserve 


s  and  a   lie;ilthv  cond.iiion  of  de- 


•lopmeiit  are  essential  to  any  mining  enterprise 
to  be  re;iarded  as  an  investment. 


iliich 


W 


ule   we  aitiireciate   tlu 


service   done   to   the   public 


and.  no  less,  to  the  industry  by  advice  of  this  kind,  we 
consider  that  it  tells  onl>  half  the  story,  and  is  calculated 
to  create  a  wrong  impression  concernin 


ikl  ininiiu 


Legitimate  gold  mining  is  not  necessarily  an  invest- 
ment, nor  indeed  does  even  so  conservative  an  industry 


far 


nuii<r   Come    al\\a\ 


mdir    this    label.      'I'liere    ar 


types  in  tioih  industries  which  ]iroceed  along  >iicli   we 


11 


18 


rilE  liCDXOMlL  S  or  MISISG 


ordciod  lines  anil  with  such  c<in.--i.cuti\c  ri^ularilv  of 
production  that  tluir  carnin;^  capacity  can  he  safely  pre- 
dicted; hut  each  exhibits  variations  of  prucedure  which 
arc  both  protital)le  and  ri>ky  in  ;i  jjroportionate  dej^rec. 
In  this  country  ^old  luinini;-  is  not  rankeil  with  railroad 
bonds,  save  b\  the  unthinkin<j;.  it  is  true  that  there  are 
a  few  properties  which  havi.'  becdine  developrd  ti>  such 
an  extent  that,  like  the  mines  on  the  Rand,  they  are, 
humanly  speakinjj,  certain  to  return  a  stated  sum  in 
ca[)it:d  /-///.v  a  definite  interest  duriui,'  tlie  period  of  ex- 
traction, but  they  are  so  few  that  the  tinj^ers  of  a  man's 
hand  suttee  to  count  iIkjsl  which  he  can  tpiole  im- 
promptu. The  moneyed  man  who  i^-^oes  into  minint;  to 
make  more  money  kucnvs  this.  He  does  not  expect  to 
find  a  Ibjmestake  or  an  .Maska-Treadwell,  and  if  you 
cross-examine  him  xou  will  |)rol)ably  discover  tliat  he 
(i  ot  want  that  type  of  mine  so  nuich  as  he  seeks  for 

a  \  •'  riltsburi;,  a  Chrysolite,  a  Yankee  (iirl,  a  Ciranile 
^lountaln,  an  Indei)ender.ce,  a  'ron(3pah — that  is,  the 
superlatively  rich  ore  deposit  which  makes  as  much 
money  in  a  month  as  the  ste;idv  ]iroducer  earns  in  ti\e 
years,  in  other  wnrds.  the  speculative  side  of  miniii!.^ 
has  an  attractiveness  which  is  at  the  bottom  of  the 
energy  w'th  which  it  is  prosecutid,  and  when  you  bring 
it  to  the  deail  level  of  ;i  stead v  investment  you  will  find 
that  the  man  of  ordinarv  shrewilne?s  will  save  time  b\ 
going  straight  to  his  briiker  and  buying  bonds  or  con- 
sols. 

The  Rand — presenting  an  unsual  type  of  gohl  min 
ing,  minimizing  risks  anil  at  the  same  time  limiting  po>- 
sibilities — has  run  awa\  with  our  cautious  adv'sor.  ( )rdi- 
nary  gold  mining  can  ne\-er  come  to  a  strictly  investment 
basis;  from  the  time  of  the  .Argonauts  to  that  of  tape 
Nome  it  has  been,  ;ind  will  continue  to  be,  an  ad\entnr- 
ous  ])ur-uit,  attractive  to  the  liold  and  av(rlded  by  tlie 
timorous. 


(,"()/-/)  .i//.\7.V(;  .;.v  j.v  ixriisiMiiXT 


1!» 


Strike  out  tin 


niiiii's  uiucli  arc  not  sound  iuvi'stnients 


from  the  undertakings  into  which  a  sensible  man  sliould 
put  his  money,  and  you  •shrivel  legitimate  mining  into  a 


drv  1) 


\\ 


hiel 


1  wo 


iild 


)n  wither  from  want  of  life. 


r.efore  the  in\estment  basis  is  reached,  the  best  mining 
undertaking  nuist  as  surely  pass  through  several  stages 
>•'{  comparative  speculativeness  as   a  child  must  run  the 


datu 


ers  of  mt-ask's  and 


ium]>s.      The   biggest   fortunes 
are  made  during  the  earlier  stages  of  development:  more 

Pl.v 


monev  is  ihade  b\- 


h 


ling  than  bv  buviiu 


nunes,  sun 


■cause  the  final  r)r  iinchtment  stage  of  a  rtrst-cl 


ass  nunc 


briiiL 


rofit.  while  it  n 


issetuial  ha/arc 
Mininfr  unde 


rtaki 


ever  can  (juite  eliminate  the 


conic  to  grief  so  often,  not  si 


much  on  account  of  failure  to  attai 


n  an  investment  basi> 


but  because  they  are  not  put  on  a  business  basis.  People 
[ilay  the  fool  and  exjiect  miracles  to  happen.  Tlie  same 
I)rocedure  would  ruin  a  grocery  establishment.  Because 
the  occurrence  of  ore  in  nature  is  uncertain,  and  mining 
as  a  conse(juence  must  necessarily  be  speculative,  there 


IS  no 


reason  for  piling  human  foolishness  on  the  top 


na 


ture"s  niggardliness.     ( )'i  well-conducte 


Oi 


(1  mining  enter- 


l)rises  it  can  he  said  that  they  meet  with  a  perceiUage  of 
success  as  large,  if  not  larger,  than  any  <ir(linary  manu- 
facturing undertaking.     The  smashes  are  more  spectacu- 


the  f 


ormer 


lar  and  the  successes  are  more  magnificent  in 
case,  but  the  average  .esult  does  not.  as  a  rule,  favor 
the  apparently  safer  f<irm  of  industry.  We  are  glad  to 
be  able  to  Ixlieve,  with  The  Iicoiw>iiisl,  that  mining  meth- 
ods are  becoming  more  sane;  and  we  recognize  that  this 
consiunmation  is  quickened  by  tin  good  sense  contained 
in  such  eontriinitions  as  those  to  which  we  have  been 
referrincr. 


MINING   RISKS 

(Eililorial.    April    4.    "Oii.t' 

Actuarial  calculaiiiMi--  tiavc  been  succLSsfiilly  adopted  m 
estimating  tlie  value  of  the  mines  on  the  Rand.  Such  a 
method  of  a;)praism-  mininj;  property  may  not  be  applica- 
ble to  the  palpitatinj;  uncertainties  of  ortlinary  Rold  veins, 
which,  while  they  miss  the  comparative  uniformity  of  the 
jjreat  Main  Reef' series,  yet  possess  possibilities  of  bonan- 
zas, the  like  of  which  are  unknown  at  Johannesburg. 
Nevertheless,  the  introduction  of  the  actuary  into  the 
proverbial  uncertainties  of  mining  would  have  seemed  a 
curious  departure  twenty  years  a^'O,  and  it  carries  \\ith  it 
a  certain  suf^^estiveiiess  which  can  be  expressn!  by 
simile. 

Mines  are  comparable  to  humanity.     The  new  discov- 
ery of  a  prospector  is  like  an  infant,  born  to-day,  which 
may  die  to-morrow,  leavint:  no  record,  not  even  a  name. 
.•\  prospect  resembles  a  youn.^r  child,  rich  in  possibilities, 
but   bedimed  around   with  all   the   uncertainties  of   imma- 
turity.     The    promising    prospect    may    succumb    to    the 
measles  of  ba<l  management,  or  the   whooping-congli  of 
iiiesperience.       In    spite    of  care  and  equipment  neither 
child  nor  prospect  may  survive  long  enough  to  make  a 
mark,  or,  on  the  other  hand,  they  may  i.ntlive  the  dangers 
(if  adolescence  and.   by   rea-on   of  inherent  ([uality,  they 
may  develop  intcj  a  mine  and  a  man  w  hich  outdistance  the 
expectations  <if  their  best  friends.     Again,  a  child  grows 
to  manhood  ;   a  pn^pcct  develops  into  a  mine.  Tiie  young 
man  reaches  the  threshold  of  a  career  full  of  promise  and 
distinction,  or.  he  already  manifests  the  evidence  of  an  early 
decadence  of  great  natural  powers:  .-.o.  too,  the  prospect, 
iiaviiig  passed  through  the  changes  of  early  development, 
niav  afford  proof  of  oiieiiing  ui>  into  a  jiropertv  of  im- 


MI.MXi,   KISKS 


21 


|](irtaiiL-c,  or,  i  iW  cdiitrary.  it  may  have  hcen  dcep- 
iiKtl  to  tlic  waiir  k'vcl  utily  to  disclose  llic  fact  that  cither 
the  sulpliide  ores  are  less  rich  than  the  oxidized  product 
near  the  snrfaee.  or  that  tlu'  material,  iiitherto  docile  to 
simple  millin-,  lia>  lu'Come  too  refractory  for  profitable 
treatment.  .\iiother  >tai,'e  uf  develo])ment  hrinijs  the 
man  to  full  matnritx .  with  a  past  of  fair  achievement  and 
a  future  of  contuuied  usefulness,  or  it  may  exhibit  the  ex- 
hausted eneri,'ies  of  a  waniiis;  career:  similarly,  the  mine, 
haviii,^  achieved  celebrit\-  by  rueans  of  a  prolific  output, 
U'ives  assurance  of  eoiuimied  productix'eness.  or.  it  may 
be.  already  shows  sijjns  of  approachinsj  impoverishment. 
I'inallv,  both  become  old.  the  man  and  the  mine:  and, 
whether  it  t>e  lont;  in  years  or  deeji  -n  feet,  we  predict 
with  ceri:iint\  the  eventual  exhaustion  of  splendid  powers. 
Mi'ii  think  ,ill  men  mortal  but  themselves:  they  also  realize 
that  all  mines  nuist  sjive  out  at  last — all  save  their  own. 
Thus  does  the  melancholy  actuary  drive  home  his  sad 
philosophy. 


MINING    METHODS    AT    JOHANNESBURG 

Bv  T.  La.ve  Lakh  k. 

TlR.  c^roatrst  .xprn.Hti.rc  of  lal.,,r  ,„  ,|k-  „,in.s  of  the 

Kan.l  ,.  n,,.,,i„.  Uu-  n.d.  fn.n  ,iK.  Mo,K.  ,o  the  n^^^ 
•"  tlic  level.  11,0  ainuum  .)f  work  miuircd  to  shovel  a 
•^'"  of  tock  from  a  Mope  into  the  ears  depends  „pon  the 
cond„,,,„,  oi^taitnuK'   n.    duYere„i    ,„,„.,.      T,„   ,,„,, 

j;''ld  nnnes,  uhe.e  ,l,e  d,p  :.  as  f^reat  as  70  ,  have  a  Kr.at 
advatua.e  over  the  <Ieep-level  con,pa„ies.  where  ,he 
i^tope>  treqnentlv  tlatten  ...t  to  ..5  .  This  llatte„inl,^  taken 
wnh  the  broken  foot-uall.  makes  it  necessuv  t,.\hovel 
over  and  over  a.L;ain,  every  hit  of  rock,  before  u  tinallv 
Kets  uitu  the  ear. 

I"   tlH.  ,leep-level  n,i„..s,  a  ^ood  ntanv   inchne-plancs 

;''^;l'-n  ....tailed  ■„  the  Hat  slopes,  so"  as  to  faohtate 

"'^'    '■•'..dh„^.,,ftheore.     The  ears  are  loaded  at  a„v  poim 

" '/     '   ''"f-  '""'   ■■''^'   "'^"    '"^^^•'••■''   ■-  ">^'   ic'vel'helow 

iu-y  are  then  detached  fnm,  the  rope  and  pusiied  to  the 

;-'>nc_at  the  land..,,   station,  where  the  rock  ,s  dun.ped 

llu.  mstallation   ,,f  a.,   incl.ne-plane  is   bv  no  means  as 

^^a>.v   as  the  san.e  nnd.  rtakin,t,^  would  be  in  a  coal  mine 

li.e  n.ad-bed  Itas  t.,  be  blasle,!  out,  an<i  the  whole  con- 

tr:va.,ce  must  be  p.-oteclc-d  a.Lrainsl  violent  blastin-   IIow- 

^■ver,    M.    much    .shoveling'   is   save.l    bv    mstuutin^r   ,l,,<e 

c.mruances  that  it  pays  to  p„t  them  in  ntost  stopes  of 

25  .  :n  spite  of  the  ,mi,al  heavy  cost.     In  the.se  days  of 

labor  scarcity  it  is  doubly  imi)eral.ve. 

It  may  be  of  infe.est.  seeinc;  that  so  much  Iias  been 
said  lately  conceniii.f,.  labor  cnn.litions,  to  mention  the 
methn.l.,  01  nmrniih,^  the  wnrkmen.  Since  ;l,e  .killed 
white  man  receive:  so  hi.^h  a  rate  ,,f  waj,^.,  it  i.^  n.cessarv 
to  get  as  much  work  out  of  him  as  possible.     Most  Jf 


MIX  IXC  Mr:!  lions  at  joii.ixxisnrRc  2:? 


til 


uiiiliTj^ii  iiinl  is  iIdiu'   1)\    tin-  iMtitract   sv^ti-ni, 


allhoiij^li  a  t\'\v  ot  tlk 


iliiii,^ 


niiins  '>i)rratr  (.■iitirrK    mi 


tl 


Wlun 

s  ill  Nii'MU',  tlir  (.■li.iiai'trr  of  uiuirr- 


(lay  s  pay,    and  serin  satislicd  with  tlu'ir  results. 


K-  (la\  >  ])ay  system  i 
L;r'iniul  uperalii  iiis  deiiends,  in  a  iari^e  extent,  nii  the 
mine  eaptain  and  tin-  slnfi  Imsses.  If  ihes  are  inferior 
(ir  inaelive  men.   the  rmii'iiiit  nf  In.-itinL:  whiei' 


oi's  (in  IS 


siirprisin^^. 


If. 


jver.  amine  is    fnriiinate  eiioiitrli  t( 


have  .a  thnrMtii^liiv  capable  mine  eai)taiii.  ulin  lias  the 
i^ift  iif  nianaj^mi;  men.  and  the  shift  bosses  under  him 
are  al.si)  alert,  the  day's-|)ay  svstem  makes  a  verv  ^"^nod 
sh 


The  eiintraet  svstem.  huuever.  setiiis  the  better  of  the 


twt 


11 


le  eo 


mjianv  never  appears  to  lose  bv  it,  .althoujj^li 


some   ot   the   miners  reeeue   iiearh    twice   ;is   bit,'-  \va<res 
as  they  would  at  da\'s  p:\\ .     (  )ne  ,id\;mtat^e  arises  from 


the  fact  that  tl 


K-  mine  eiii])Ioyme 


the  contract  svstem  at- 


tract'' tilt 


St  \vorl<men.  who  realize  that  bv  this  metlio<l 


tl 


<  \  ,-ire  thrown  en 


tireh 


111  their  I  lU  11  resonrces.  wi 


th  tin 


chance  of  t\-nniiii;  bit;  waye.-.  if  tlie\  work  both  witli  their 


li:i 


th 


leir  heads. 


tl 


he  iiioditications  of  the  contract  systcn  are  lA  prac- 

fi  ir  instance,  employ 


I'.'il  importanci'.     .Some  manasjer.- 


it  throULjhoiit  the  ii 


imc,  except,  ot  course 


for  ti 


nii)erinen, 


trackmen,  jiiimpmeii,  etc.      I 
rcjck  is  broken  b\  contract, 
il 


n  such  a  case  every  piece  o 


lien  there  arc  mines  iisinpf 


a  combination  of  day's  pay  and  the  contract  sy.steni ;  those, 
for  instance,  which   are  traversed  bv  dikes  and  broken 


country, 
contract. 


rendering  it   ditficnlt    ti 


)rk    th 


Hind    on 


I  here  is.  of  ctjurse,  a  limit  to  the  amount  a  contractor 


IS   a 


11. 


to   make 


this   limit    \aries   in 


it?. 


rent 


mines,  and  at  diff 


erent  jieriods  in  the  liistorv  of  the  same 


mine, 
when  till. 


liefore  mill 


in.sj;  oiierations  commence,  for  instance 


re  is  great  earrerness  to  push  the  development  in 
.■tioiis   as    rapidlv   as   possible,   the   contractor    is 


I 


■21 


nil:  LtUXu.Mli^S  Ui-  MIMXG 


allnuiMl  to  innkr  a  liaiuisoiiu"  sum,  iiioiitli  MWr  iiinntli. 
uitlintu  i\ai  Ml'  a  cm.  CJii  one  In-  mine  luTr,  ht'forc  the 
"■"■-  'I  lii'>i"ii|4li|y  coiii|iri(.  lit  111'  ■,  r  con], I  makr  I'rom 
^,v"3  '"  s^5"<>  I"-!"  month  ihirinj,'  thr  (kwlopiiKiit  sta.i;f, 
1)111  ulicn  the  mill  conmu'iiced  o[)frations  this  fill  a  <;ri-at 
dial,  >o  that  on  ihis  [jioprrty  .Sj^o  |nr  month  is  now 
ahoiit  llu'  lii^di-water  mark. 

I".vi'n  attiT  the  mill  starts  crii-liiiii.;  it  {.■,  consiikrcil  no 
more  than  lair  that  rontrai.-tor>  in  driits  and  .diafts  should 
be  paid  liij.;lRr  than  mcii  en.iiaj^cd  in  stopinj;-. 

I'.  rc(|uircs  coiisiderahli'  skill  and  experience  to  manaj;e 
tile  contractors  to  the  hot  ailvanta^e.  The  mine  captain 
.-hoiild  1)1  an  exptri  jiid-e  of  -round,  ;iiid  he  careful  to 
ha\e  the  price  iieiilier  loo  hi-h  nor  too  low.  He  must 
he  just,  i  he  writer  once  worked  with  a  contractor  in  a 
dri\e.  It  w.-es  iiolic.  il  that  for  three  weeks  in  the  nioiith 
he  Worked  like  ;i  Trojan,  hnl  dn!  very  little  in  the  latter 
part  of  llie  nioiith.  1|)mii  heiti-  i)res>ed  f.ir  an  e.\|)lana- 
tioii.  it  wa.s  foiiii.l  th.it  lie  calcukued  he  would  he  (jut  if 
he  worked  .strenuously  all  the  month,  so  he  took  it  ea^v 
after  bein^r  sure  he  had  done  etion-h  to  -et  a  -ood  wa<;e. 
In  tins  case  the  jirice  was  e\idently  too  hi.^Ii.  .\'or 
should  the  price  be  too  low,  f.  ir  if  too  -real  a  cut  is  made 
an  etticient  man  is  liable  to  Ka\e  for  another  mine,  where 
he  can  make  more  money.  (  )iie  basis  of  calculation  is 
that  a  contractor  who  works  hard  everv  dav.  and  inan- 
a,L;es  to  ilrill  40  to  45  ft.  ;i  ,la_x  .  ami  to  hhist  successfully 
all  the  holes,  should  be  allowed  lo  make  about  SJ50  ])er 
month.  Will,  such  terms  a  man  must  w.irk  dili-.  lUly. 
]f  he  lu-lects  his  work,  or  is  not  iiitelli,miit  about  it.  he 

s  the  risk  of  In  111-  in  di  bt  at  the  end  of  the  month, 
there  are  times,  however,  when  the  mine  c.ipt.ain  recoin- 
mends  that  the  pay  of  a  contractor  wh.o  has  done  poorlv 
be  bn)UL,dit  nj)  to  day's  pay,  and  in  such  cases  the  man 
receives  niori'  than  he  has  really  earned.  Discretion  lias 
to  be  Used,  for  if  ih-  contractor  tliinks  he  is  ;ilwavs  sure 


.l//.\/.\(,   Ml.lllUD.S  A I    JUll.l.\.\l:.SliL'Ku    j: 
tif  ;it    lia^!    il;i\'~   p.iv    !n    i^   ajit    in  Iwiiij;^  hai'k    with    hu 


In  slope  contracts  the  ii^iial  iin  thml  is  to  pay  so  imioh 
per  sr]ttnrc  fathom.  |  ilu  umi  kudw  ,if  any  niiin  ■•  hire 
wlurr  ihr  nulhiMl  ni  paviiit;  mi  iinuh  jut  tun  l)r(ikrii  is 


,,,1 


eiiiplov  eii. 


Ill   iiiiiu  ■^  that  an-  run   "ii   the  inntracl 


tein,  iiinih  n\  tJu'  re>iiiinsil)ihty  i^  taki'U  Iroin  tile  shoiil- 
(Krs  I  if  thr  mine  cajitaiii  and  ])iit  iipun  tlie  survey  depart- 


IIKIII.     w 


hu-h 


-piin--ilin-     iiif     the    uua'-iirinLC    I't    tlie 


rroimi 


1.     T 


IIS 


)f    St( 

(I 


ope  iiiea>nMni,'-, 


ittit  tlie  [ 
hut 


iiaee 


o  enter  uittj  a  (hscussion 


trust 


a  (lescriptiMU  of  the  methnds  u^ 


liall  l)e  ahle  to  write 
at  some  future  (kate. 


'1  he  prices  paid  for  stMpiiiL;'  \ai  \  .  of  eoiir--i'.  in  the  chlTer- 
i  nt  [larts  of  llie  mine,  and  dept  nd  npon  the  ediaraeter 
I't  tile  rock,  whither  the  slope  is  uiiilcrli.ind  or  overhand 


lii.U'.t 


est  ranije 


I 


^iiow    ot.   ill  aii\    one  iinne,  is   troiil 


$14,30  to  $17.50  per  s(|uare   fatiioni.      In   other   pro])er- 

ahhouirh   there   is   proliahU    not 


ties    tl 


!>ricc 


htter. 


stope  m   tile  (hsiriet.  at   lerst   in   the  c 


deep 


mines, 


that 


IS 


\\o 


rked    for  less    than   Sij.^o   per    S(|uare 


fathom.      (  )n    the    averaeje   Sifi    can    he    considered    the 


prevai 


liiu 


)iitract( 


])rice   aioni;    the    Kand.   at    the    present    time. 
s   are   provided    with    Kat'tir   labor,    for   which 


lev 


)a\ 


per    (lav 


per    man. 


Th 


e\-    are    eiiarLTetl 


or  the  stores  t!ie\'  use.  sueli  as  dMiamiti 


use,  canities. 


itc.  and  at  some  pro])erties  tliev   e\en  ])av  for  the  shar])- 
eiiiut,'-  of  the  drills. 

\\  li.at  is  a  L,'ood  month's  work  for  a  contractor?  The 
number  of  S(|uare  f;itlioiiis  stojieil  out  with  two  air  drills 
(.and  it  is  almost  the  universal  practice  for  each  contractor 
to  run  two  drills  exceiit  in  the  drifts)  varies  as  much  as 
the  prices  paid  ]ier  -cpiare  fathom.  hVoiii  j8  to  46  stpiare 
fathoms  erives  an  i(h;i  of  tlie  rani:;<'.  About  36  scjuare 
fathoms,  with  two  machines  workint;  a  sinsjle  shift,  niav 
be  Considered  ltoocI  work.  The  slopes  averat;e  4,75  ft.  in 
width.      In   driftiuL;    there  is  considerable   variation   also. 


! 


.'« 


THE  LCOSOMliS  Ol-  MI.\/.\C 


III  scum-  drifts  a  rmmd  of  (v,.lvc  5i-it.  li,,k-s  is  made, 
wliilc  oilicrs  ncumc  \(,  liolcs.  A  man  working  will,  one 
itiacliiiic  in  nnfavoiahli-  j,'roini(l,  nut-  shift  per  <la\,  is 
(loinK  fjoo.l  work  if  lif  makes  40  ft.  [ht  niontli.  ['w\cr 
favt)ral)Ii'  rnndituMis  lu-  may  niana.i;f  50  ft.  pir  iiionili 
Tlie  prices  for  driftiiij;  vary  from  $<)  to  $10.50  per  foot. 

<  'w  nit;  to  tlu'  scarcity  r,i  iluap  lahnr  tlicrc  arc  few 
sto|H.'s  hcing  worked  li\  li.iii.l  drilk  i  v  It  wmdd  tie  advan- 
ta.ui-ons  in  most  stopcs  to  suhstitiit.  .Irillin-  l>\  liaml  tor 
macliities.  and  wlunevcr  it  is  po^sihie  it  is  done.  A  ulntr 
niiiuT  i,.  -iveii  cliar^e  of  a  mnnlier  of  Kafiir';,  30  to  40, 
and  works  the  stope  on  r(  niract 

'I'lie  contract  system,  ulncli  I  liave  trie<l  to  describe, 
li.  riainly  not  tile  doctrine  of  trades-iinionisni,  winch 
Iiie.ulies  tli;it  ever>  man  ij.iiii-  the  >anie  cla^s  of  work 
should  receive  the  >ame  wa-e.-,  \n\-  day.  Hut  llure  is  a 
certain  anionnt  of  trailes-iii.ion  feelincr  even  .iiimho  ,]h. 
coiitr;ictor>.  It  i>  ^eiurallv  un<lerstood  that  ;i  da\'s  work 
consi.sts  oi  piittiiiL;  III  4  hiiiiv  5^  it.  dee].,  pir  inacliiiie. 
When  the  men  are  on  contract  they  sti^-k  to  ihi-  >taiiil- 
ard,  and  only  in  a  few  c;i-e>  d.j  i1k-\  tr\  to  dnll  nmre 
than  four  holes  fur  each  machine.  It  has  nitin  lueii  tried 
t'.  ;ie->;i'ade  them  to  drill  nior.-,  l,ut  ilicy  ar^^ue  in  the  usual 
way,  an.l  do  not  chaiiLje.  \\  hat.  ilien,  is  the  ad  vain.",  l;--  ■■< 
nsin.i;-  the  cuuract  s_\>tein.  11  the  men  do  not  drill  nn-re 
holes  th.iii  they  would  ,,n  the  day's  pa}?  In  the  lirst 
place,  the  men  ii.-e  their  heads  more.  lo  see  [he  care 
with  which  a  successful  cmtractor  [dtcho  hi-,  holes,  so  as 
to  break  the  nui.ximum  amount  of  rock,  makes  one  reali/e 
the  ditlerence  between  a  contract<ir  and  a  waj^^e  miner. 
Then,  to,.,  the  conir.ictor  is  miuh  more  careiiil  with  hi> 
stores,  d\naiiiite,  candles,  etc.  ,ind  waste  is  thus  reduced 
to  a  minimum.  Ami  a-.-iin,  the  contractor  does  not  loaf. 
He  attends  strictlv  to  business. 

Many  a  mana,i;er  has  been  surprised  to  tlnd  how  early 
some  of  the  contractors  finish  their  drilling   i,,r  the  da\'. 


Mixixc  Ml.  I  Hops  .11  Jo/i.i.wnshCh' 


l.s   lint   all    Ulllri 


i|iKiU  niiiirrciui'  I. J   I'mil   a  mnuailni, 


makiiij;  nojcl  pay,  rtiiish  drilliii),'  dpcratioiis  Ijy  2.30  o'clock 
I'Viry  (lay.  Ulastiiii;  is  imt  allnwcd  hcforc  5  oVIock,  and 
except  the  prcjjaration  nf  tiic  cliar^'cs,  the  cnntractor  duc-s 
nothiiiR  from  2.30  iitml  hlastinp  time  It  i>  naiural  iliat 
.1  maiia^'er  should  try  u,  (levi>e  a  sclieim  uianhv  the 
i(.tii|,any  may  i,'et  the  advantaije  of  thes,   idle  junirs.     At 


tirst  the  iiifii 


well    a 


-krd 


an  1  \tia 


hoi 


e,  wtieiit Mr 


P 
lailu 


sih 


e.  tile  promise  Iniii},'  j^iveii  that  tiie  rate  per  square 


stopcd 
it    the  selu  III 


IK 'II 


Id  Hot  111'  ledticed.     'i'liey   t'oii.t,dit   shv 


pieterrtd  to  make  less,  r; 


itlier  tlian 


overstep  the  hcimds  of  liie  reeoj;nized  day's  work.     Thei 
the  selunie  was  tried.  ,iiid  i     s'ill  lieint;  tried  mi  a  sm.i 


scaK 


e,    01    payinp    the    coiitratiors    -o    nnuii 


d! 


tier    to.it 


drilled,   in  i^rdir  that  eaeli   man   mav  drill   the   maxiiiuith 


luimher  ot   Irtt   p( T 
tractor  is  ii^ed  a-  a 


doiiht 


lilt.     r.\    this  arran^'eiiKiit  the  con- 
IrilKr      If  the  plan   works  well,  no 


rejjtil.ar   hla-ters 


havinp  iinthinn-  ti 


le   employed,   the   eontr.'ictor 


o  uiih  the  hlastini;  o])eralions. 


method  of  workinj.;  roiitr.iets  seems  to  have  met  with 


This 

con- 


siderahle  success  in  oil 


success  has  attended  it  here 


ur  jian,  of  the  v.orld.    .So  far  littU 


the  first  place,  by  ailopt- 


iiii,'  this  arran.uement.  the  responsihility   f.ir  the  contracts 


shifted  from  the  snrvey  cUparinient  to  the  shift  ho: 


sses, 


and  this  is  undesirahle.     Th 
the  scheme  as 


leti.  again,  the  miners  oppose 


iieiii";  an  innovation. 


It  look 


s  as  it  in  the 


tiiture.  as   in   the   p.ist.   the   general   \\;iv   ( 


contracts  in  the  Witwatersrand  <;;old  mitn 


basis   of  area 


>I   carrxiiiL;  on 
s  will  he  on  the 


stojied  out,   without  any   reference   to   the 


amount  of  drilling;,  or  the  thickness  of  the  slopes. 


■  y[>*' 


NOTES  ON   ZINC  MlNiNG 

Bv  W.  LiKci.  Waking. 

(July    4.     nyoj.) 

I'dluatioit  of  Zinc  Oics. —  I'lic  vahir  ni"  anv  ^inc  ore 
(lilRiids,  (  i)  upon  its  i)(.TCinta,L;v  cmitciit  <<i  niL'tallic  zinc; 
(.J)  up.'ii  uln-iliiT  the  rr-nluuin  left  after  simltiii.^-  f(.r 
sjic'Itcr  i.r  for  /iiic  nxidc  can  he  ])rotital)ly  treati-d  fur  i^dld. 
silver  or  cupper,  ur,  as  in  the  case  of  fraiikliiiite,  fur  nian- 
ganese;  (jj  upnn  its  ])erceinai,'e  cunteiit  ni  deleierimis 
eleiiKMits  which  either  det-ric  irate  the  pmdiict  ur  increase 
the  expense  uf  reduction.  Tims,  lead  and  iron  in  con- 
siderable anKJUnt  detract  frum  the  value  ni  ore  fur  the 
latter  reason.  Zinc-hlende  is  deducted  as  an  ulijectiunaMe 
clement  in  calamine  ores,  and  calamine  when  found  in 
blende  ore  is  not  paid  for.  Cadnnum  is  deleterious  fur 
certain  purposes,  also  antimony  and  arsenic.  Sulphur, 
which  coniposes  about  one-third  (  '^  tlh  weii^ht  of  pure 
■jack'  or  zinc-blende,  is  not  considered  as  an  element  of 
value,  becau.se  the  cost  of  converting  it  into  sulphuric  acid 
(a  .lecessity  at  some  works)  leaves  little,  if  any,  profit. 

The  price  paid  to  the  ore  producer  per  unit  of  metal 
(a  unit  here  meaning  jo  lb.  or  i  per  cent  of  2,(xxi  lb.). 
therefore,  varies  with  the  (|uality  of  the  ore.  Thus  in 
Missouri,  wlu  re  the  "as-ay  basis'"  is  .S,^()  jn  r  ton  for 
blende  concentrate  containing  60  per  cent  metallic  zinc, 
concentrate^  containing  only  20  jier  cent  zinc  are  abso- 
lutely unmarketable;  when  the\  contain  40  per  cent  zinc 
with  little  or  nu  irun  they  are  worth  _>-,  .  per  miit  of  metal, 
or  $10  per  Ion  ;  with  Oo  per  cent  zinc  the  unit  jirice  is  50c.. 
and  when  they  ,i>say  ()4  [)er  cent  zinc  the  value  per  unit  is 
53ic.,  or  S_u  I"r  ton. 

ft  fuiiows  that  the  miner  who  fails  to  clean  his  zinc  ore 
up  to  the  economic  limit,  which  for  zinc-blende  ore  is  held 


NOT  PS  OX  7.  IXC  MIX  IXC, 


t.  <  iiK'an  that  from  2  to  A  per  cent  of  sand  or  earthy  matter 
max  nniain  in  the  concentrate,  is  throwing  away  value 
when  lie  sell;^  the  iii>uftieientiy  cleaned  material.  I'or  ex- 
ample, 1  ton  of  the  40  per  cent  ijre  above  cited  is  worth 
but  Sio;  if  it  can  be  cleaned  to  as^ay  (jo  per  cent,  even 
allow  inj,''  a  reasonable  waste  of  10  per  cent  in  tlie  opcra- 
ti'ii,  It  will  proiluce  i.joo  lb.  of  (jo  ]Hr  cent  ore,  worth 
3i<S,  a  j,'a;n  of  $S.  If  cleaned  lo  as>a_\  04  per  cent,  the 
pnnluct    would    wei^h    \.\2^    lb.,   and    would    be   worth 

The  only  fair  and  efjuitaljle  method  \et  discovered  for 
ascertaininjj;  the  value  of  any  metallic  ore  is  l)y  assay. 
Iluur  and  seller  are  a.like  protected  by  this  means,  even 
against  (hrect  fraud,  jjrovided  the  u-nal  jirecautions  are 
taken.  These  precautions  are;  (  1  )  That  ilie  sampling  be 
thnnnighly  done  as  the  ore  is  delivered,  and  in  the  pres- 
ence iif  both  bu\ir  ;uul  selli  r  1  ir  their  resji' iii~ible  .'igents  ; 
(2)  that  an  umpire  sample  be  sealed  at  the  time  of  sani- 
plinu  :  (.^1  that  the  percentage  of  moisture  in  the  ore  as 
delivered  be  ascertaiiud  iniitu  duaielx  ;itter  the  weight  i- 
deterniined.  The  la-t  jirnxi^n  i>  necessary  because  the 
assay  can  ''■\^\\-  be  made  uji'in  the  dried  sample,  and  there- 
fnre  rt'presents  the  percentage  comeiU  nf  tin  ore  U'.inu^  it- 
moisture.  Obviouslv,  in  settling,  it  is  immaterial  whether 
the  ilednctioii  for  moisture  be  .'iiijilieil  to  the  gross  weight 
"i  the  (ire,  or  to  the  ()rice  to  be  ]iaid,  pi  r  ton,  or  to  the 
product  of  the  weight  by  the  jirice  ]ier  ton.  bm  it  c.amini 
be  applied  to  reduee  the  as^ay  valuo. 

fft'f<,'/(/  (;//(/  ri>litnii-  of  Zii'C  Cov.rrutratc. — The  dry 
weight  of  a  bin  of  ore  or  concentrate  m.iy  be  estimated 
ver\-  rl'><el\,  if  the  s])ace  occupied  liy  the  ore  be  meas- 
ured and  the  weight  of  the  ore  per  cubic  foot  is  kno'i:' 

The  following  dat.a   relative  t.i  the  speeific  gr:i\it\ 
weight  per  crbic  foot  of  zinc-lilende  concentrates  and  two 
or   three   othc    ■  itunion    constituents   of   Mi-;^ouri    and 
Kititiu'k\-    /mc   tivc^.    were   nbi.-iined    from   careful    te^ts 


su 


THE  ECOXOMICS  OE  MlX/.w; 


"la.lc  in  tlu-  l,-.l„„atnrv  nf  W-.^uv^  &  Son.  at  WVI.l,  C,t^ 
Al"..  and  arc  lum   Lu"  tin-  lirst  tune    uade  pnl.lic. 

IlK'  nmurals  i..t.,l  u.r.  pure  massive  blende  from 
rn.pcniy.  Aj,,.  o.ntainiiiy  (,.,  piT  cent  zinc,  with  about 
1  per  cent  at  sulphides  ,,t  ca.Iminm,  e.q,prr  an,!  ir,,n  and 
havmn.  a  .p,.„f,^  ^^avity  of  4.05:  marca>ite  (coekscoml, 
pyru.  I  irom  tlie  sime  place;  j,valena  from  \\VbI.  CitN 
AJo.:  clean  tlint  from  the  same  place,  and  avera-e  tluor- 
.<par  iron,  Livingston  comuv.  K^.  The  sample,  were 
cru>lu.|  to  5-mm.  size  ,  1-5  „,.  ,  and  fmer.  then  as.nrted 
by  siltmj,'  mto  4  sizes,  namely.  5  mm.  t<,  j  mm.  (  1-:;  i„ 
to  i-ij  m.)  :  2  mm.  to  i  mm.  1  i-i.>  in.  to  1-2^  in. ,  ■ 
I  nim.  tn  „.J5  „„„.  (  i-_.5  in.  to  i-ioo  in..  :  la^tlv"  mi.ler 
0.25  nm,..  or  o.oi  in.  The  wei.trht  in  pounds  „f  a  cubic 
foot  of  each  sized  material,  closely  p 
down,  was  then  ascertained 


packed  and    sh.aken 
.     .  -Ti''  last'v  the  weight   of  ,a 

cubic  lont  „t  e(|u;d  parts  ,,f  the  various  sizes,  mixed  was 
determme.l.  The  specific  gravitv  oi  each  mineral  was 
then  ascertamed.  a-^  given  in  cohmm  t<.  below.  .Since  the 
weight  ,.|  a  cubic  f..ni  of  water  i>  verv  nearlv  62.5  lb  the 
weight  ot  I  cu.  ft.  of  each  miner.al  in  tlie  snlid  -late 
was  found  In  multiplying  the  >pecific  gravitv  bv  6^5 
g.vmg  the  figures  of  colun.n  7,  The  increase'in  volun;.' 
brought  abnut  by  crushing  each  mineral  to  the  above 
fineness  is  shown  in  column  8.  the  figures  of  which  are 
found  by  dividing  those  ni  column  7  by  those  of  column  s. 


.Material. 


•s.  - 

■r,  - 
Ll>. 

'7.  - 
I.!). 

4<  = 
-  2 

l.li" 

=  .iS 
I.Ii. 

d 
■n 

1    1, 

Pure   Cilen.i. 
.M;irca>iti' 

-'5«« 

-M«3 

-'.si  J 

JOl  J 

.U';o 

738 

1     11, 

4i'l 

1.442 

(nuimlic). . 
Pure   Blitide. 
I'liiorsp.'ir   .  . . 
Clean    Idiiit.. 

I  IV.s 
IOO() 

77.y 

11,?  1 
1  ^oo 
97.S 
754 

IJI  ') 
71.0 

100.7 
75  1 

i(k)7 
170.7 
i-'7'i 

4  ,sl4 
40.S 

.^'4 

jS2 

-'5.! 
l()(, 
Kit 

'  7.^5 
1 .4.'^^ 

'  .S.U' 
I  7(,s 

XOT/-:S  ox  ZIXC  MIX/XG 


31 


The  common  statement  tliat  vein  material  oecupu?. 
twice  the  space  aftiT  hreakint;  is.  therefore,  not  c|uite  true 
of  rather  finely  connnimited  minerals:  and.  as  the  al)ove 
resnhs  show,  the  increase  in  vohmie  varies  acccjniing  to 
tile  shape  of  the  panicles,  since  tile  Hint  and  niarcasite 
lirea!<  into  scales  and  elnn<,^-lte(l  ani^nlar  frau'ineiUs,  while 
the  particles  i.f  the  other  niiiuniK  are  luarlv  i-niiKtric. 
I'yrite  and  hornite  wonld  no  floiibt  j,dve  verv  different  re- 
sults from  those  olitained  with  niarcasite. 

Specific  Gravity  and  Coiuposilioii  of  Zinc  Minerals. 
I:tc—\n  the  followin<j  list  of  ziiic  minerals,  and  other 
minerals  nsnally  associated  with  ores  of  zinc,  the  order 
followed  is  that  of  their  specific  irravities,  be.t^innini,^  with 
the  heaviest.  The  .sjiecilic  .q-ra\itie>  -iven  are  compiled 
from  si,-|„dard  authorities.  The  percenta<,a'  compositions 
are,  houexer,  specially  computed,  usin.t,'  the  International 
Atomic  Weights  for  Kjo,^,  and  refir  to  the  theoretically 
pure  minerals.  It  must  be  borne  in  mind  that  some  of 
the  minerals  named  are  very  rarely  found  in  a  state  nf 
IHTtect  imvitv.  Thus  blmde  nearlv  alwavs  contains  from 
O.J  to  I  per  cent  of  other  sulphides  than  that  of  /mr. 
while  marmatite.  pvrrhoiiie  ;uiil  chalcoiiyrite  are  very 
vari.ible  in  compi  isiiion. 

Assay  ResiiUs  as  a  Gi'  -  in  Ore  Pressinjr^ — Ti,e  assay 
of  a  sample  of  zinc-ore  concentrate,  showintj  the  per- 
centage r,f  each  metallic  element,  as  zinc,  iron,  lead,  etc.. 
.mves  the  mine  mana.i^er  a  means  of  .letectinij  defects  in 
the  mill  work.  It  the  character  of  the  minerals  compos- 
iiii;  the  ore  l-i  known,  the  percentatre  of  each  mineral,  of 
which  OIK  elemeiu  is  determineil  bv  assav.  may  be  com- 
puted from  the  data  of  the  lasi  cohmin  in  the  preceding 
table. 

Ihiis  i„  ,-,  lot  of  concentrate  consistint^-  of  blende, 
pynte,  -alena  and  sand  or  earthy  matter,  the  peiventaf^-es 
of  zinc,  iron  and  lead  bein;?  known  by  assay,  the  propor- 
tion of  bleiule  is  fom^d  bv  multiplyinirthezincby  looand 


Tim  JJA).\UM/CS  (>/•■  MIXIXG 


-I 


00   >• 


•—  C 


>,  in 


s    =     -^ 


c  »  .■• 


s  s  ~  =  '> 

.J  J  ■■-  o  ■-  £ 

_•  ^  X  ^  -^  n 


'  U  y  o   y  O   u 


e         X      5 


■5:i 


=     -.2>    »  = 


N      -  4 


i     - 

o       ■* 

d     ""•  — 

"  di. 

.H^  - 

N       .    C 

§  4'^ 

^  —  ir.  ^ 

5  c 

"     E  ' 
J  F  H  o 

1  :.£,= 

•    ^    U 

?:  tl  = 

"-C 

5* 

do 

ii 

USUI. 

U-.  f-l  ^ 

tic 

<^oq  i 

^ 

-  ^  -  - 

K 

'  «   "~ 

M 

d  **■  " 

o 

—     ta,  — 

^ 

-n"^"" 

**        m' 

- 

*?     « 

u 

^~:r:; 

-:: 

o      c  ■? 

wi       5C 

d       - 

.t    ^  ^ 

>='    >i:i 

'^—.2  — ■=  c.  — «  —  fl 


in  fv  o  O  3 
CX  i  m  - 
fj  f)  **)  *•!  to   ' 


«;*. 


ID  -t  ff  -O    "t    O- 

*?  O  lo  in  u->  ■4' 


■4  -r      -T 


u~* 


3  yi 

-   •  ;  t^  "  >, 

^  :<:  ■^  ,  =  i:=  c  . 
"m  y  S  '-'H  ."^  •-  "  — r 

-^  t  ir  .C   t-^-X    3-  C 


•  ^  —  o 
:  6t "  " 


w     ^     c  , 


■-  .-  -C  <-<   ~   1>     .  — 


■."To  "        tC^ 


^<        ^   ^   i 


■SE 


p       a      ._  ! 


b   3 

.1 S; 


^o     n     Hi; 


A'OTI-S  (>\  ZIXC  MIXIXG 


33 


Ei 


'■K 


(iivuliiii;  li\  iIk-  ])iiix'm;i!L;'  uf  zinc  in  blende  (67.10), 
ami  -iniilarly  t'nr  p\nte  and  j^akiia.  The  snni  uf  the  per- 
centai;es  so  found,  deducted  from  100,  shows  ahov.t  tiie 
proportion  of  sand  nr  earthy  matter  in  the  material,  a  fact 
ofli'u  \ery  desir.ilile  to  k-imw. 

Another  method  i.^  to  multiply  the  perceiitacfe  of  each 
element  found  hy  assa\,  hy  a  factor  obtained  for  each 
mineral  bv  diviiliii-  its  molecular  \\eij.;ht  into  the  atomic 
\\eiL;!u  uf  the  elenieiil. 

d'he  following;  incMmpktt  list  of  such  factors,  also  spe- 
cially CMiiijjuted  from  the  International  Atomic  Weij^hts 
fir  1003.  will  be  found  of  use  to  mill  luaiia.L^ers  as  well  as 
assa\ers  : 


Metallic  zinc 
Mot.illic  zinc 
Met.illic  zinc 

Metnllic  zinc 

Met.illic  zinc 

Met.illic  zinc 

Metallic  znic 

Met.illic  iron 

Metallic  lead 

Metallic  lea.l 

.Nk'talhc  lead 


X    1.49 
X    1S44 
X    1.9174 


Metallic  copper   .X   2.8.S7 

.Sulphur  X   3.04 

.Sulphur  X    1.8718 

Sulphur  X  7.4.1.?!; 

l.iinc 

Lime 

Lime 


=  Zinc  Mende, 
=  .Silicious  calamine. 
:=  Smithsonitc    (car- 
bonate). 
=:  W'illemite. 
=:   Hydro, incite. 
=  Zincite    Czinc  o.\ide). 
=   l-Vanklinite. 
=   Pynte. 

—  (ialen.i. 
=^  An){leMte 

=  Cerussite       ( Icac       car- 
bonate'). 

=:  Cbalcopyrite. 
=:  Zinc  blende. 
=   F'yritc. 

—  (ialena. 
X    1.7S5O  (or'""r,ii)     =:  Calcite. 
'*-    '.^45                       =  Idiiontc   (Ikiorspar). 
^   .!  0"-2                            =   Selenite   (>;yp>iini). 


X  17064 
X  1.0526 
X    1.2446 

X  .S.385 

X  2.144  <'>r  2'.t) 

X  1. 155 

X    1.4(14 
X    129 


GOLD   MINE   ACCOUNTS 

(July    II.    1903) 

77/t'  lliiiior: 

Sir — 1  am  ,l;I.ii1  tn  acccjit  ymir  iiuitatii'ii  to  iiia'a'  sntnu 
remarks  wi;  the  subject  uf  ^uKI-niiiic  accnunts.  All  effi- 
ciently maiiaj;ecl  mines  these  chiN^  ha\e  s\  stemati/.ed  ac- 
cmiiUs  ^hiiuint;  in  result  the  wnrkiiij;  cost  ]ht  ton  of  ore. 
r.ut  there  is  a  most  hara'-sini;  lack  of  tmiformitv  in  the 
methoil  hy  which  the  last  result  is  arrived  at,  anil  in  this, 
some  iliscussiun  in  your  esteemed  JoiuxAi.  coidd  lie  most 
useful. 

1  ir>l  and  T'lreniost,  mme  accounls  >hould  he  >\stt'uia- 
tized  in  ^uch  a  niaiuier  as  t"  firevent  fraud,  and  should 
hi,'  so  jiresented  as  t(.)  carry  conviction  of  liouestv  to 
the  owners.  Second,  the  accoinns  should  he  jirepared 
in  such  a  way  as  to  show-  the  e.xix'nthture  in  varior.s  de- 
partments on  s(nue  unit  basis,  so  as  to  enable  the  iuana.[::er 
and  his  >taff  to  compare  rt'sulis  of  various  departmetUs 
and  various  periods  within  his  own  mine  and  also  to 
compare  restilts  with  his  neiij:hi)nrs,  that  he  may  be  as- 
sisted in  hi'-  intermediate  campaimi  for  economy  and  im- 
pro\ement.  Third,  t'l  be  presented  in  such  a  way  that 
the  owner,  director,  shareliolder  or  what  not  ma\'.  for 
himself,  b\  comparison,  determine  somethinc^  of  .!ie  cfti- 
cieiicy  of  the  mana.q'er. 

At  the  out>et  1  do  not  want  some  ii:ilf-baked  person  to 
rise  and  ieinin<l  us  that  the  varvin^T  conditions  (under 
which  mines  of  dilfereiit  countno  work,  or  mines  of  the 
sanu  country,  for  that  matter,  or  e\'en  mines  on  the  same 
vein,  or  evi'ii  different  jjartsof  the  same  mine)  may  render 
comparisons  misleading-.  We  all  know  that  the  factors 
which  i^fovern  workinjj;'  costs  are  labor,  su])i)lies,  size 
of  orebodies,  character  of  the  ore.  volume  of  ore  treat- 
ed, de])tli,  etc.,  etc.,  and  that  these  factor^  are  never  pre- 


corn  Mixr.  .iccmwrs 


36 


:isii\-  tik 


aiiu-  in  am-  tuc  iiiiik'^-,  imr  tur  aiu'  two  m'l•lth^ 


and  iliat  {'ro-i<>nii,i  .nni|iai  i>"n>  'na\  .^ivc  iln  tn^t  man 
a  hku'k  eve  and  put  an  nifttii-icnt  man  nn  a  lii^li  i  tdi'.^ial. 
r.nt  all  tins  dm.-,  m-t  rrndir  CMnijiari.Mins  \ahK'lt.->-,  tnr  in 
tlu  hands  (if  the  man  wIid  kncws  the  riinditi"n>  tlir^e 
same  vvnrkinj;  costs  enalilc  tlu-  manaijc'  to  determine  very 
i|iiit'''!\'  tiu'  a\emu'--  t'nr  impniNin^^  the  efticienex  of  a  de- 
Darti'.ent.  vr  ])ermit  the  dwner  of  the  mine  to  determine 
tiie  etiliciencv  of  the  manaijer  himself.  The  rivalry  j^rowint,' 
nut  of  snch  ei  imi)ari>i  Ml--  in  its  ineeiuiw  t"  ecin^iniy  and 
liiL;hest  el'iieienew  when  teniiK-ri'd  wiih  capaciiy.  has  heen 
hy  iM  means  the  lea>t  faetm'  in  red  mi;,'  u'ild  minint^ 
from  an  ahsolute  Sjieenlatinn  tn   an   in  !al  enterprise. 

In  nrder  that  these  \aliial>K'  inlluences  .nioidd  have  fnll 
pkiv,  iliere  is  a  er\iiiL,'  need  fiT  t.'Teater  nnifnrniitv  in  the 
formnkation  I'i  mine  aecMimts  inli'  llii-  nhini.itc  re^tdts 
of  wcirkiiiL;  costs.  'i"hi>  i>  imt  a  new  idea,  hii'  the  n>efiil- 
iKss  of  it  is  nvrv  evident  tlie^e  lairr  w.ars.  In  eatise  nf  the 
constaiitlv  ineri'asinLT  ])nliliiily  t^iwn  ti>  workitiL,''  resnlts 
1>\  reason  cf  the  lar^i-  ]iroportion  of  mine  dwiiership  1)\- 
luibhc  stock  com[Kmies.  Tliis  pnl)lieit\  uf  accounts  ren- 
ders results  available  for  comparative  ])iirposcs. 

The  lir>t  purpose  of  accmmts  recpiires  im  discussion 
here,  for  it  is  a  matter  <>i  competent  hookd<eepini;.  and 
ilrlleetioii'-  are  matters  for  the  police  to  look  into.  The 
tise fulness  of  the  second  an<l  third  purposes  depend  for' 
tluir  i^reatest  possibilities  upon  uniformit\  in  the  same 
mine  and  on  neit^hliorini::  mines,  and  still  better,  on  all 
mines.  As  said,  all  \vell-manas:;ed  mines  show  results 
I 'f  I  xpendiinres  in  wurkiiij^  costs  on  toimai::!.'  basis,  but  tlie 
\ariation  in  method  of  allocation  of  expenditures  to  vari- 
ous departments  differs  most  harassini^ly.  In  tlic  first  in- 
stance, iti  America  and  South  .\frica  the  short  ton  is  used, 
while  iti  .\tistralia  and  India  tlic  lone;  ton  is  u-;i'(k  and 
therefore  the  latter  are  lo  per  cent  different.  In  most 
F.ncflish-owned  mines  exiK'iidittirc  is  divided  '.nto  'Capi- 


:!»; 


////•.   liCUXOMIi  .s   Ol'  MIXIXG 


tal'   and   'Urviinu-.'  ilfvrlopiiunt   and  cmistructinn  hi'in 
i;cnrialh    rhari^i  d  tu  liu'  fornKT.  anil  written  oft   the  lat- 
liT  and  ilui-  ti'  \M>rkin!^  costs,  1>\-  ri'dcniptidn  nr  ik'pri'cia- 
tiMU,    and   ;     \\i<li'    variation   tN:.~t->   in    both    the   c'naraftcr 
of  the  r\]K  [diturt,  cliar^i'd  to  cajiital  m  tlie  tirst  instance. 
and  in  the  amount  char^'ed  off  afterwards,     for  nistance. 
in  development,  some  managers  charj^e  \\in/e>  and  raises 
to  development,  and  nilurs  to  Mi  .pin,L;".     Some  even  charge 
repairs  an<l  renewals  to  ra])ita!,  on  the   theory   that   they 
kee])  the  plant  uj)  to  a  fixed  state  of  etfieieney.     In  writinj,^ 
develi']}ment  '  dt  liv  redemi)tion  mt  deiirec-iation,  >ome  enm- 
panies   do  it   on   the   hasis   of   the  avera^a'   cost    i)er   ton 
developed,  others,  to  heat  the  income  tax  commissioner, 
write   I'tV  all   he    will   allow.      Some  companies   write  off 
depreciation  of  plant  im  a  known  life  for  the  mine,  others 
on  a  hoped-for  life.     Some  comi)anies  distrihnte  a  part  of 
the     i,'eneral    charges    over    capital    expenditure,    others 
char!j;e   it   all  off  to  revenue   at   once.       Some   managers 
charge  pumping  to  ore  extraction  and  some  partly  to  de- 
velopment,   while   others   charge   it   partly   to  milling,   as 
being  the  sour  e  of  mill  water      hi  or-'  treatment.  ..onie 
companies    give    cost    of    treatment    on    one    generalized 
tigure,  which  is  valueless  for  comparison,  because  one  ore 
niav  involve  "tie  operation,  while  another  may  involve  five. 
Most  eoni|)anies  distribute  treatment  costs  over  the  whole 
tonnage  milled,  yet  the  proportion  of  tailing  treated  by 
cvanide,  for  instance,  may  vary  from  50  per  cent  on  one 
mine  to  100  per  cent  on  another.     Some  i        lanies  deduct 
the   cost   of  realizing  bullion    from   their    receipts,    while 
others  charge  it  to  working  costs,  etc..  etc.,  ad  infinitum. 
In  a  few  instances   there  is  evident  intention  on  the  part 
of  the  management  to  obscure  real  costs,  but  in  nifjst  it  is 
merelv   difTereiice   in    method    and   oi   opinion.      Another 
feature  worth  discussion  is  how  far  expenditure  for  ilissec- 
tion  of  costs  is  warrante<l  by  results  to  be  attained,  and 
how  mucii  detail  can  be  used  within  tlie  realm  of  accu- 


Ca)I.I>  mix  I:  ACCOVSTS 


87 


r;n\ .  it  is  nn  tlu^c  iiiattiTs  vvluTi-,  if  ;m  ajjfrccMiicnt  couM 
hf  reaclu'd.  discussinii  wcnild  lie  most  \alual)lc.  It  mi,i;ln 
l)i'  a  work  f(ir  tlu'  Aiiicricaii  Institiitc  nf  Miniiif^^  l'-"Ki- 
inrr>  and  tlic  l-.iis^lisli  lnstituti(i!i  of  Miiiiii)^  and  Mctal- 
liir^;\  ti>  ap|)iiint  a  cctiiinissidii  to  furmulatf  sniiK'  plan  cf 
v\(irl\in,L;  oust  statcmi'nts,  as  a  result  ol  sucli  discussidiis.  I 
am  sure  tlu'  profession  would  loyalK  introduce  and  adluTc 
t(i  ^ni-li  a  plan,  and  it  would  meet  the  ajiproval  of  the  mine 
owner  at  the  same  time,  for  the  nsnlts  could  not  hut  he 
lieiieticial  to  him  in  the  end.  II.  C.  Hu(j\'ek. 

Luiiduii,  June    16,    iye>,j. 


THE     PAYMENT    OF     EXTENSIONS     OF 
MINING  PLANT  OUT  OF  REVENUE 

Hv    l',l)\VARU   W'ALKtK. 

1  J  UlV      11.      I  'i^^^    ) 

In  ;i  rrrciU  1,.  iniKiii  Ultrr  1  fffimil  t"  tin.-  pniK-ipk' 
laid  '1..UI1  b>  Mr.  C.  .\l}4i.r;i(Ui  Moriiiip  at  tlic  niri'tiiif; 
of  ^hariliDldi.T.'-  iif  (ircat  Ini.yall  loiisnlidatrd,  tliat  all 
CNpi-niliturc  (in  i!i.vi.lii])nKiit  of  a  niinr  and  (.-xtensioii 
(if  nRlalluruical  ]ilanl  .-lnuild  in-  paid  fur  wliciu'vir  pns- 
?.ibU'  out  of  rfvi'iun  .  1  lu-  (|ut.■.^tloIl  ijcforu  the  sliart'- 
liii!(K't>  ua>  ulictli'  lu  nru  plant  .should  1)l'  fiaid  for  by 
addnii'nal  caiHtal  r.i.Mil  liy  tin-  i-^iu'  nf  new  shares,  or 
wlKlIier  tile  large  balance  of  divisible  protil  (some  £loo,- 
ocMii  shiinld  he  devoted  to  tiiat  purpose. 

■j'he  ineidi  nt  npeiis  np  the  .i^itieral  ipn-stion  of  the 
suitabilitv  of  the  ordinarx  methods  of  accouniinL;  to  the 
special  case  'if  mining,  and  some  discussion  of  the  sub- 
ject   VMiuld   be   opjiiirtune. 

The  inetli'id  of  kecpini,'  accounts  of  minini;  companii'S 
as  ado])ted  in  i.ondon.  differs  in  r.o  \\a\  from  the  stand- 
ard system  fur  connnercial  ami  manufactnritii;  eiUer- 
prises.  All  preliminar\  expenditure  on  pro])erty  and 
plant.  sub~e(|uent  expenditure  on  extensions,  and  the 
cost  of  sinking  shafts,  are  charged  to  ca])ital ;  and  current 
expenditu!\-  i  m  labor,  supplies,  mainti  nance,  and  renew- 
als .re  ciiarged  to  revenue.  This  is  the  theoretical  prin- 
cijile.  but  the  method  of  carr\  ing  it  out  de])ends  ujxin 
the  circumst;mces  of  each  individual  case.  It  need  bard- 
ie lie  said  th;it  the  great  de-ire  of  directors  is  to  show 
that  tluv  can  declare  a  dividend,  and  whenever  extra 
expenditure  iiecomes  necessary  for  tlu  purpose  of  sink- 
ing ,1  new  shaft,  or  ])ro\iding  additi'inal  or  improved 
plant,  there  is  always  an  inclinatieui  not  to  interfere  with 


.i//.\7.V(;  I'L.Lxr  i:.\  I  rxsioxs 


39 


tiu'    iliviilriiil 


hut   t 


II   i^^tii-   lu'w   .siiarc- 


It 


tlu'   niiiiiiiLr 


markit  i;.  l)ri>k,  ami  if  the  directors  arc  lu'ld  in  l;.hi(1 
I'^ici'iii,  owitiij  tn  llu'ir  siifocssful  iiiaiia'jit'im-nt  ni  the 
]irii]Krt>,  then'  is  vrrv  little  (lit'tii'nll\  m  r;;'  ■  tlic  ad- 
ilitioiial  capital.  If.  Imucvn.  the  market  is  depre-sed, 
and  the  directors  do  not.  for  one  reason  it  another, 
care  to  a>k  for  snh--criiitiiins  to  new  >harrs.  then  the 
e,\tra  expense  is  met  out  of  re\t'mie  if  possible.  In 
other  cases,  when  it  is  imp.  issihle  to  issue  new  shares 
an<l  when  there  is  nut  sutticient  accumulated  profit  to 
Hurt  the  reijuireil  e.\pi  inliluri  .  tempoi'.irv  loans  ai^aiiis; 
the  ore  reserves  or  a,t;ainst  the  j^eiieral  assets  of  the 
company  are  made  by  directors,  shareholders  or  others, 
.ind  the  loans  afterwards  p.iid  'Hit  nf  revemic. 

Typical  exami)les  of  tin  \arious  n-ethods  of  meeting 
extra  exiienditure  ma\  be  i;i\en.  The  iiutliod  of  pro- 
viding- lor  it  by  the  issUe  of  new  capital  is  well  exesn  ■ 
phlled  by  the  case  of  the  \;irions  ^old  luinint;  c(jmpanies 
"p' ratinu;  in  the  Kolar  Di-iriit  of  India,  under  the  man- 
a,L;enient  of  Messrs.  John  Tavlor  \:  ."^oiis  \\liene\er 
nione\  h;is  been  reipiired  for  increasiui.;  the  plant  it  has 
been  raised  by  issuin;.,'  new  shares,  althoiii.;h  tlu'  mints 
.It  the  time  may  ha\e  been  yieldiii;.;  profits  lar^yer  th.-m 
tin-  amoimt  rt'(|uired.  h"or  instance,  the  Mvsore  i  iolo 
.Minint.;  Company  has  paid  over  three  million  pcnmds  in 
di\i(lends,  but  <lurin^  its  dividend-paylnt;-  life  no  less 
than  £()45.()(x)  has  bet-n  raised  b\  the  issue  of  niw  shares 
fiT  the  purpose  of  meeting;  expenditure  on  additional 
plant,  nn  the  fjeneral  overhaulint,'-  of  pnjperly.  and  on 
sinkinL,--  nciv  shafts.  The  orii^dnal  ca])ital  of  the  companv 
was  i'i35,(xxj.  and  at  six  difYereiit  times  new  shares  have 
been  created  of  a  nominal  value  of  / 122,500.  As  these 
shares  were  all  issued  at  substantial  premiums,  the  cash 
received  amounted  to  £645,(X)().  as  above  mentioiu-d.  Iti 
aildition  to  these  shares  issued  for  cash,  shares  of  a 
nominal  value  of  £32,5015  have  been  issued  for  tlie  pur- 


4U 


THIi  ECONOMICS  OF  MIMXG 


rliuM-  111  ailii'iiiiiij:  pH'pt rtiis,  xi  tliai  tiic  iioininal  capi- 
i.il  til  till'  mmpaii)  at  tin  proiiit  tinu-  is  £jyo,ocxi. 
riii>  piilii\  has  alwnvs  htin  uiiaiimuiu^ly  afjrccd  to  b> 
sliari'lmliliT-  iii  ilu'  Indian  ^mouii.  ami  as  a  matter  of 
tad  llu  iKu  ^liari'>  ari'  usu.ilU  al)>iirtitil  hy  sli.nTlicild- 
crs  /Ti'  rata. 

An  ilhistratii)ii  of  tlu'  sn-oiid  iiu'tliod  of  pasin^  for 
fxliiisions  is  to  1)1-  met  witli  in  tlu-  case  of  the  (ireat 
l-'iii^al'  Consolidated,  already  referred  to.  !'.xanii)Ies  of 
this  ix)lic\  are  also  to  l)e  f( mid  in  I'le  conipanus  con- 
trolled by  the  I'.xploratioii  ('.nnp.inx.  1  he  1  oiiilioy 
Ciold  Mines,  Limited,  was  floated  l)\  the  iCxplor.itioii 
Compain  in  iX()<;,  witii  a  capital  of  t\}oo,(xX).  In  190J 
additional  plant,  to  the  extent  of  60  stamps  and  acces- 
sories, was  erectetl  and  paid  fcjr  uitirely  out  of  revenue. 
In  addition  to  this,  when  the  original  l\)niboy  Mine 
showed  signs  of  exhaustion,  new  properties  adjoining 
wi-ri-  acquired  out  of  revenue,  without  it  beiiif;  neces- 
■-arx  to  issue  aii\  more  shares.  1^1  (  )ro  Mining:  &  Rail- 
way L'oiniiany  also  presents  another  example  of  the 
policv  o  .le  I'.xploration  Companx.  .\n  ;iddition  of  IiK) 
stamps  is  now  beiiij;  provided  from  revenue.  In  this 
case,  adjoinint;  properties  were  actiuired  by  the  issue 
of  new  shares  a>  purchase  price.  These  new  propertie- 
added  to  the  capital  vsluc  of  the  possessions  of  tlie  com- 
pany. The  ori}.;inal  property  was  showing;  no  sifjjns  of 
exhaustion,  as  was  the  ca>'  with  the  Tomboy,  where 
a  new  property  was  acquired  in  place  of  the  old  one. 
rather  than  in  addition  to  it 

.\  gopd  example  of  the  third  way  of  providing  exten- 
sions is  to  In'  found  in  thi'  ( ire.it  I'.otilder  Perseverance, 
Mr.  Frank  (iardner's  chief  West  .Xustralian  property. 
Tliis  mine  was  originalb-  Il'iated  in  ;8o5  with  a  capital 
of  £175,000.  .Alter  the  tirst  three  vears  the  oxidized 
ores  came  to  an  end.  and  gieat  difficulties  were  experi- 
enced in  finding  a  suitable  process  for  treating  tile  re- 


A//.\7.\7,  PL.IXT  liXTENSIONS 


41 


fractory  ores,  riurc  were  lui  xuriilii-.  profits  available 
for  ex]Hiinifm  or  for  crcctiii;;  a  larf;c  plant.  The  cost 
was  cntrels  borne  h\  Mr.  Ciardrcr  and  bis  friends,  and 
the  amount,  sormthing  li^t  £i5i),(xx>.  Iia-  >-incf  been 
niiaid  out  of  prortts. 

Ilavinjj  mentioned  the  usual  inetliods  of  mininp-com- 
pany  finance  adopteii  in  Londdn.  1  will  proceed  to  discu>> 
the  general  (|uestioii  a^-  lo  llie  .ipplicability  of  the  ordinary 
methods  of  accouiitiiij.;  to  the  s|)ecial  case  of  riiinin);.  It 
i^  held  1)\  a  j,'reat  many  pri  i|es>ional  men  coiiiucted  with 
mining  that  far  less  expenditure  ^lll.nld  br  ebart^ed  tr> 
capital  account,  and  that  lb<'  fij^aires  at  which  the  oris^iiial 
value  of  the  pro()erty  and  plant  stand  amoni,'  the  as.sets. 
-ln'ulil  be  reduced  as  r.qjidly  as  possible  .\  mine  is  not  a 
permanency  like  real  estate,  and  the  value  of  the  machin- 
ery dejjends  almost  entirel\'  nn  the  supi)lv  of  ore.  Some 
alteration  --honld  there  f.Te  be  made  in  the  u^ual  practice 
of  enteriufj  up  the  price  paid  for  the  property  and  ei|nip- 
meul  at  unalterable  figures.  It  is  true  that  mn>t  nf  the 
carefully  manaj,'cd  mininj;  companies  make  allowances 
every  year  for  depreciation  of  plant,  but  few  make  anv 
provision  for  the  depreciation  of  the  projierty  itself.  The 
conseciuence  is  that  sharehoUlers  receive  dividends  which 
they  ref.;ard  as  profits,  and  concurrentK  the  value  of  the 
-hares  decreases.  The  real  profit  of  the  transaction  in 
iiuyinj,^  mining  shares  i-  the  difference  between  the  orif^i- 
na!  purcha-e  i)rice  of  the  >hares  and  the  sum  of  the  total 
diviiknds  added  to  the  eventual  price  of  dis]  >al  of  the 
-hares.  We  have  the  continual  phenomenon  in  l^)ndon  of 
profits  to  mining  shareholders  concurrent  with  a  gradual 
or  suddi'u  loss  of  capital. 

Such  a  method  of  mana.eing  mining  compani'  -'  finances 
is  illogical.  Some  part  of  the  profits  nf  cacj-,  year's  work 
should  be  devoted  to  the  reduction  of  the  capital  account, 
and  all  expenditure  subsequent  to  the  initial  cost  <u'  the 
property  anil  equipment  of  the  mine  should  be  paid  ou; 


42 


THE  HCOXOMICS  01-  MIXIXG 


ni  the  rcveniu-.  The  method  of  reducing  the  value  at 
which  the  property  and  original  plant  s'-^.nds  in  the  hal- 
ance  sheet  \  luUl  depend  largely  on  circumstances,  it 
might  he  agreed  from  the  first  that,  say,  one-fifth  of  the 
value  should  be  written  oft'  every  year,  and  when  the  total 
a.ssets  had  thus  i)een  replaced  by  cash,  there  might  be  a 
return  oi  capital.  Another  plan  would  be  to  have  a  re- 
valuation every  year,  and.  if  the  value  of  the  ore  reserves 
was  less  than  at  the  beginning,  to  replace  the  deficiency 
with  cash  from  the  year's  profits. 

It  might  also  be  suggesteil  that  the  nnniinal  capital  at 
the  end  of  every  year  -hould  be  rearranged  so  as  to  rep- 
resent the  actual  value  of  the  properties,  but  this  scheme 
wduld  lend  itself  to  nuich  abuse,  in  addition  to  which  tiie 
legal  fees  and  government  taxes  would  swallow  up  far  t(K) 
nuicii  money. 

It  is  not  often  tliat  a  n-arrangenient  of  the  nominal  cap- 
ital of  a  mining  company,  so  as  to  bring  it  nearer  the  real 
value  of  the  prciperty,  takes  place;  as  a  rule,  it  only  hap- 
pens when  a  mine  has  become  exceedinglv  prosperous 
and  the  dividends  jiaid  are  so  high  that  the  market  (juota- 
tioii  for  the  shares  is  greatly  enhanced.  Then,  for  the 
purpose  of  facilitating  market  dealings,  the  nominal  capi- 
tal of  the  company  is  expanded  so  as  to  bring  the  current 
([notation  nearer  par.  Recent  examples  of  the  capital 
being  reduced,  when  it  was  found  that  the  properties  were 
Hearing  exhaustion,  are  to  be  found  in  the  case  of  Mason 
t*t  Ilarrv,  and  the  Mountain  Copper  Company.  In  the 
former  case  cert;iin  proportions  oi  iiroti".-  were  distributed 
to  shareholders,  not  as  dividends,  but  in  reduction  of  the 
eajiital,  while  in  tl.e  case  of  the  Mountain  Copper  Com- 
panv,  the  company  v>as  reconstructed  and  the  shares  ex- 
changed for  debentures  which  are  redeemable  out  of  tb.e 
lu'i  ifits. 

Discussion  on  the  subject  would  not  be  complete  with- 
out a  reference  being  made  to  the  incidence  of  ihe  income 


MIXIXG  PLAXT  EXTEXSIONS  43 

tax  on  the  profits  of  iiiiniiig  coinpaiiics.  As  in  the  case 
with  directors,  so  it  is  vv  ith  he  income-tax  commissioners. 
They  like  to  be  able  to  siiow  a  large  profit.  They  are  very 
jealous  of  the  allocation  of  profits  to  what  they  call  capital 
expenditure.  \ery  little  is  allowed  in  the  way  of  writinj; 
off  for  depreciation  of  plant,  and  profits  applied  to  the 
extension  of  plant  and  the  sinking  of  new  shafts 
are  invariably  assessed.  In  the  case  of  the  Mysore  com- 
pany, if  the  extensions  had  been  paid  out  of  revenue,  in- 
stead of  the  profits  being  divide<l  and  new  capital  issv.rd, 
none  of  the  profits  tluis  allocated  would  have  escaped  the 
income  tax.  Similarly,  the  profits  of  El  Oro  and  the 
(ireat  l'"ingall,  used  for  the  purpose  of  extending  the  plant. 
have  been  assessed.  The  conniiissifuiers  would  never 
dream  of  accepting  the  proposition  I  have  made  for  con- 
ducting the  finances  of  a  mining  company,  but  that  is  no 
reason  why  the  system  should  not  be  adopted. 

This  subject  is  capable  of  considerable  discussion,  and  I 
hope  that  your  readers  will  contribute  theii  opinions  and 
experiences. 


ORE  TREATMENT  AT   KALGOORLIE 

(August    15,    1903.) 

The  Editor: 

Sir— in  vour  issr.u  ut  July   11   Mr.  Philip  Argall  con- 
tributes sonic   valuable  discussion   regarding  the   Uiehl 
process  as  relating  to  Cripple  Creek  ores.     As  Mr.  Ar- 
gall's   information  regarding  the   progress  of  metallur- 
gical  practice   at    Kalgoorlie   stems   to   be   three   years 
behiinl.  and  tlierelore  his  basis  of  argument  wholly  er- 
roneous, 1  trespass  upon  your  space  to  give  some  recent 
and  detailed  costs.     Aside  from  other  matters,  1  think  I 
can  show  to  Mr.  Argall  that  he  is  wholly  unwarranted 
in  believing  that  the  roasting  processes  must  ultimately 
prevail  at   Kalgoorlie.     Much  progress  has  been  mad 
in  both  processes  at  that  place,  and  Mr.  Argall's  figures, 
which  were  taken  in  the  early  stages  of  sulphide  treat- 
ment, do  great  injustice  to  both  methods. 

I  think  1  can  do  no  better  than  to  give  the  detailed 
costs  in  the  Lake  \iew  mill,  choosing  that  one  because 
it  is  treating  an  ore  of  similar  character  and  a  tonnage 
more  comparable  to  the  tonnages  handled  by  the  large 
roasting  plants  at  Kalgoorlie.  The  Lake  View  mill, 
however,  will  not  ultimately  be  the  best  advocate  of  tlie 
wet-milling  bromo-cyanide  method,  for  it  is  an  adapted 
plant  V,  !th  a  stiimp-mill  of  bad  design  and  construction 
for  a  basis,  and  the  accessory  plant  is  not  arranged  to 
best  advantage.  Moreover  the  power  plant  on  this  mine 
(now  under  construction)  is  the  worst  on  the  field.  Yet, 
even  with  these  liniidicaiis,  the  results  are  far  different 
from  those  upon  which  Mr.  Argall.  ])robably  for  lack  of 
more  recent  data,  has  formed  hi>  judgment 

1  have  taken  the  month  of  March  as  an  average 
period,  because,  since  that  time,  experiments  with  a  50- 
ton  daily  plant  of  another  process  have  been  in  progress 


ORE  TRI-.lTMEXr  AT  K.ILGOORLIli 


11(1  1 


lavc 
s  tin 


.(.■n  iliargcii  into  costs,  soniewliat  coiif 


cost 


s  t-ivcn, 


liow 


ever,  arc  a 


fa 


ir  avcraL'c. 


usin^ 
1 


Iiavc  reduced  all  tomia,c:cs  and  costs  mentioned   in  this 
ccjninuinicatioM  froni   the  lonj;  ton  to  the  short  ton,  so 
(3n  the  footing;  of  American  practice, 
nnt;  the   month  a  varying  portion  of  a  70-stamp 


as  tti 
1)1 


treated   8,444   '""s  with   a  duty   of  5,191    ton 


[XT 


-.tamp  per  day.    The  costs  include  superintendence,  etc. 
I)nt    nut   depreciation.     Water  does   not   include   boiler- 


feul. 


which  is  included  in  power.     The  costs  of  mill 


md  concentrating  8,444  tons  were,  per  t 


mg 


on: 


.Milliiic— 


and   waKo- 


$0  0<>)7 


'  '-"■"   ""lli'iK $0.6722 

Coiicciitratnitr — 

Salaru-,  aii,l   wages $0.0896 

^^■•"^•,':    0.0257 

^."'•'■"•^    0.00J8 

'"'•■"    o.040t 

■■^^^•'>"'«    o.ooi.; 

Total    i-oiirt-ntralint; ^   ,g,2 

rolal,  JILT   ton   inilKil $0  S'u 

riie  cost    .-.f  treatment  of   j.t)62   tons   of  tailing  were 
as  follows,  per  ton: 

Salaries  and   waRc- jo  ^ 

;"^''^"""  '•>;"i"'^-  o:,^M 

l'.r..iiin-o\ani(lc    „      ,__ 

l.une      ,",  °i" 

-/  ,        00^2.' 

Suplmru-   ,acul ^,  ^^^ 

OtlUT  Mipphos   O 

^, V^'7    0.027, 


4t; 


/■///;  i.coxoMics  or  mimwj 


■I'lUal.  piT  tdii  ni  tailing $_>  -715 

'1'Ik'  cii>t>  ijf  nia>tiiii;  and  c_\aiiiilin_L;  4SJ  tons  of  coii- 
cciilraK-  w  (.Tc  a>  follow. ■>.  \kv  loii ; 

Koastincc— 

Salaries  aiul  wages $0.9407 

I'ucl    0.3157 

Siipi)lies    o.o.V*'^ 

rrau^pcirt  and  (lr\  nif;  nf  ore 0.4050 

Mainteiiancf    0.0443 

Power    o  J^^\ 

Assaying    0. 0?<47 


■|-..tal 


$j,07if) 


Cyauuling — 

Salarie-   aiul  watres $0-539' 

l'i)las~ium   cyaimle    0,^1/(13 

Siilpliunc   aeiil    0.01113 

l.inie   0.0!  14 

Ziiic  shavings   0.0314 

Water    0.0X50 

Otlier   supplies    o.iSoj 

X'aintcnance    0.351:? 

Power  o.()OJi; 

Assaying    o .  14  j3 


Total    $2,640? 

T'ltal  cii-t,  per  vm  ni  ecmcentrate $4.7209 

Coiiihiiniii;  tlust.'  stalcmiMits  of  cost,  ami  reducing  all 
the  a\eraj;i.'s  to  the  jjai-is  of  tons  niillcd,  \vc  uhtaiii  the 
follow  iner  results: 

Milling  anil   eoneentrating $0.8531 

2.14JJ 

iiK'eiitrate o._'(«)9 


Treatnuiit   of   tailing. 
Roasting  and  eyaiiiding 


Tiit.il   co-t   per  ti'ii   niiUed. 
Rovaltv    


o. 1069 


Total  co-t   $3  37 -'4 

The  yield  wa-  ahout  S14  ]>er  ton.  the  extraction  92 
per  cent,  and  of  this  65  per  cent  \\a>  secured  iioni  the 
concentrate  and  tiurefore  did  not  i).iy  royalty.  Tlie  ile- 
fcctive   arranijeineiit    and   construction   uf    the    mill    and 


ORE    TRRAi'MEXT  AT   K.lLCOORUr.       17 


I>uucr  plant   resulted   in   a   cost    for 


power  and   niam- 


tenancc  alunc  in  excess  of  tlle^e  co>is  on  the  Urova 
iiruuniiill  of  38.5c.  per  ton,  altliout;li  the  latter  treats 
but  4,o<x)  tons  per  month,  so  it  must  he  obvious  that  a 
well  constructed  i)laiit  on  the  Lake  \  lew  u(juld  work  at 
t  of  under  S3  per  ton.     The  Ivanhoe  plant,  now  in 


a  co> 


course  of  alterat 


ion  to  treat  iJ,ooo  tons  per  month,  will 
vurk  for  not  over  S- 75,  iir()bahly  ,'f_'.5().     The  Oroya 


irownhill  mill  is  n 


jw  in  cour>e  of  enlarijement  and  al- 


teration, and  when  complete,  aIthouf,di  treating  the  most 
re  on  the  field,  siunild  show  also  good  results. 


difti 
II 


cult  o 


owe\  er 


the  figure  of  S3  above  is  sufficient  to  show  tl 


le 


■ousness  of  the  figures  of  S7.86  i 
plus  rovaltv  in 


c-  — 

VD// 

for  tln'  1  )iehl  cost.< 


in  one  instance  and 


another,  as  quoted  by  Air.  Argall 


Lack   of  ecpially   recent   and   detailed   data  from   the 


larger  roasting  mills  at   Kal"oorI 


:)f  co.sts  difficult. 


renders  comparison 


for  1902  shows  the  costs  on  that 


lie  .uuuial  report  of  the  ( ireat  Uould 


er 


mine  to  be  S 


S5  per  ton, 


but  this   lias   been   somewhat   reduced   since,    I    believe 

ig  about    12,500 
witli  the 


'erse\erance,   ireatin 


Tlie  (ireat    I'.oulder    1 
liort  tons  per  month,  gives  the  latest  result,- 


^3(^5  ■  In 


what  items 


largest   tonnage  on  the  field 
are  included  I  d(j  r.n  know. 

Ilie  ua-milling  l)io.:K)-cyaniding  method  requires 
about  20  per  cent  less  power  than  the  dry-milling  roast- 
nig  method,  and  involves  less  cost  of  maintenance,  and 
also  involves  not  over  yo  per  cent  of  the  fir>t  cost,  and 
thertfore  less  depreciation;  and  above  all  it  avoids  dry- 
ing the  ore  and  roasting  04  per  cent  of  it.  These 
economies  are  accompli-hed  practically  at  the  e.xtra 
expense  of  concentration,  bromo-cyanicie  and  rovaltv. 
I  he  use  of  bromo-cyanidc  partly  replaces  potassium  cy- 
atii.le  otherwise  required,  and  altogether  on  the  Lake 
\  lew    these   special    items    involve   about    70c.    per   ton. 


(  )n   the   other  hand   a 


crushing   mil!    uf   the    same 


48 


/'///■    l:C()X().\HCS  Ul-   MlMXu 


toiii:a-e.  treating  Lake  \'inv  ore  for  extra  drvin-,  extra 
power,  extra  roa>tnig,  extra  cyanide  and  extra  wear  atul 
tear,  would  iiivulve  fully  $j  jht  ton 

There  is  iiothin-  very  novel  in  the  Diehl  proeess  be- 
yond the  well  understood  methods  of  stamp-millinR, 
eoncentrating  and  cyanide  treatment  of  gold  ores,  ex- 
cept the  grinding  ,.f  the  entire  tailing  to  slime' and 
the  addition  of  bromo-cyanide.  The  rationale  of  the 
process  makes  niueli  toward  economy  and  steadv  im- 
provement. The  royalties  expire  in  another  four  years, 
but  aside  from  this  I  think  I  have  shown  that  there  is 
no  prospect  of  displacing  the  process  in  that  region  in 
favor  of  dry  crushing  and  roasting,  especially  as  the 
comparative  extraction  seems  to  favor  the  wet  method. 

Many  details  of  Mr.  Argall's  understanding  of  Kal- 
goorhe  practice  are  altere.i  by  present   practice,   more 
especially  the  fact  that  the  dry-crushing  roasting  mills 
grind  all  ores  to  slime  for  t^lter-press  treatment,  instead 
"t  treating  a  portion  by  percolation  as  he  states.      The 
wet-cru>hing    mills    do    not    return    roasted    concentrate 
to  the  battery.     Kalgoorlie  metallurgists  do  not  have  the 
same  apparent  aversion  to  filter-press  treatment  of  tail- 
m.g    as    Mr.    Argall.      The    economy    of    percolation    of 
sand  over  agitation   and  filter-nress  of  slime   for  a  pe- 
riod of  six  months  on  the  Iva  .hoe  is  but  40c,  per  ton 
beside  the  cost  of  grin.ling,   of   which  a   portion   would 
disappear  in   the  greater  economy   of  filter-pressing  if 
the  whole  product  were  so  handled.     The  compensating 
advantage,  in  extraction  by  fine  grinding,  considerably 
more  than  makes  up  this  difference  in  either  process. 

As  to  the  relative  merits  of  the  two  processes,  as  ap- 
phed  to  Cripple  Creek  conditions.  I  am  not  sufficiently 
mformed  as  to  the  character  of  the  ore  to  offer  a  judg- 
ment, having  only  been  on  that  ground  for  a  few  days- 
but  I  might  point  nut  that  power  costs  at  Cripple  Creek 
are  not  15  per  cent  of  that  at  the  Lake  X'iew  mine,  that 


ORL    Tia-.ITMHXT  .IT   K.ILGOORLIF. 


\'.\ 


the  cr.t  of  v.atcr  noiild  h:  almost  nil.  the  cost  of  cyanide 
and  other  su  n;:^.,  'uss,  and  that  the  treatment  of  c.n- 
CL titrate  wniml  he  nn.ch  niure  ecnnnniieah  Tliese  nnir 
items  vvoidd  Meiiiiit  treating  Lake  \  iew  ore  un<ler  Crii)- 
ple  Creek  c.)n(hti.n.  with  a  u 1 11  e< instructed  mill  of, 
say,  8,5CX)  tons  capacity,  for  not  over  $2  per  ton.  A 
point  worthy  of  con>i.kTation  by  Cripple  Creek  opera- 
te.rs  is  the  adaptability  of  this  process  for  erection  on 
the  mines   themselves,  and   therefore  the   avoidance   of 


i.i^ht   chari^es   and   cnstnms-mi! 


Ijnifus   and   esjiecialiy 


the  possibility  of  modifying  the  practice  to  take  advan- 
tage of  some  of  the  more  favorable  characteristics  of 
Cnpple  Creek  ores,  as  compared  to  those  of  Kaltrnor- 
lie.* 

London.  July  29.  1903.  H.  C.  Hoover. 


,  111  a  fnrnuT  article  on  tl,e  M.hjert  Lake  \-iew  co^ts  we 
K.ven,  ,nrlu,l,n«  tran-port  to  tlie  mi.I ;  in  thi.  statement  for  co, 
p.-jranve-  purposes  they  h.-,ve  t,een  omitted.  F,  i.  e.pe  ;,I  v  no" 
'•-1  out  agani  that  tlie  above  eo-t.  are  upon  a  .hort-  on  ba -1. 


re 

coni- 

point- 


GOLD  MINING    ACCOUNTS 


Till'  Editor: 


I  AuKU't    15,    I'JOJ.) 


SiK— 1 


n  vilur  i.sMi 


c  of  July   II,  Mr.   11.  C.  IIodvlt. 

f. 


_\iiur   rr(iuc'.->t.   (>i)(.n.->   fur   (li.>cu.->iuii    the   >ul)ject   of   j^nld 

niiuiiij.;  accDiints.     Ik'inj;  associaud  with  tlu'  niaiiagiiiunt 

if  a  mnnljcr  of  very  prospcron.s  iiiiuos  in  variou.s  parth  of 


tivj  woricl,  .Mr.  li( 


i\cr  sp 


ak.s 


iih  li 


iL'  atitlioritv  of  one 


111  a  positiiin  to  kiinw  and  one  who  appreciates  the  vahie 


if  luiifiirmu 


V  ni  tl 


treatment  of  exinnditiires  of  capital 


mil 


ol     re\ei'lie 


ami 


tl 


le    keepuiL;    ot    nnniiig-cost.>^ 


accounts. 


In  the  business  of  niininj,',  custom  has  not  yet  estab- 
lished a  uniform  method  df  char.i^dnf,'  ex()en(litures  for  <le- 


veji  ipiiKnt  or 


f.T  tl 


le  t'xteiision,  renewal  and  niaintenance 


f  machinery,  plant  and  ei|uipment.     (  )w 


iiu 


to  the  varv- 


iiii;   eoniii 


tions   under    which 


nlo^t    minm'j   ventures   are 


tinanced  and  mana,i;ed  from  the  head  ot'fice — leavint;  tli 
varyiiii;  conditions  at  the  mine  out  of  the  (|uestion — it  i 


doubtful  if 
le  attaiiui 


umtormity  ui  tlie^e  particulars  can,  or  ever  wil 


1.     Hut  it 


is  po>Nibk-.  and  (|uile  within  the  pro\- 


ince  of  the  profession,  to  urj;e  a  con.-isteni  det^ree  of  uni- 
formity in  the  practice  of  statin.!?,  if  not  of  keei)iiis. 


wiirkmsj;  costs. 


Tl 


le  SUL 


'cstion  that  a 


mine 


mimission  01  the 


tichnical  societies  be  apix'inted  to  take  up  this  work  ouLjhi 
to  meet  with  favor. 

Discii.i.-ion  of  the  feature 


■-u.UL^ested  as  to  "how   lar  ex- 


penditure for  dissection  of  costs  is  warranted  bv  results 
to  be  attained  and  with  bow  much  detail  it  can  he  done 
within  the  re.dm  of  ;icciiracv"  niiLiht  lead  t< 


a  more  gen- 


eral discussion  of  the  whole  subject  of  cost  keeping. 

The  results  to  be  attained,  or  in  other  words,  the  ben- 
efits realized  liy  a  frequent,  regular  and  systematic  dissec- 
tion    of    wirking    costs,    are    comnioiilx     acktiow  ledi^ed. 


ilil 


.f 


Goi.n  Mix/xc  .iccorxTS 

momics   arc  accompli.slKd,   and   a   material   rcdiicti 


mminp;  costs  is  cllirtcd  in  tlic 


ind  nuiiicy.     It  is  ix)s-,il,Ic  to  secnrc 


saviiij,'  of  time,  inertly 


1  formation  of  tli 


■•picifi 


(IctaiK 


c  ciKts  of  work  at  tl 


Its 


U'  iiiiR'  nt,  and  durinj,', 
ts  jiro^'rcss.  A  better  opportunity  is  afforded  for  maknit: 
a  critical  discrimiiiatuMi  lietwe.  i  capital  and  revemie  e.\- 
IK-nditures,  as  tlie  legitimate  operating  exiutises  are  writ- 
ten off  cacii  month.  And  the  maiiaj.;er.  dependin<,r  with 
full  confidence  up-'ii  his  monthly  cn>i-slieet,  is  relieved 
of  a   mass  of  detail  and  his   mind  is   free  and  clear   for 

planning  for  the  future. 
mo>i  imp,,rtani  result,  and  not  so  "cn 


directinfjf  current  operations  am 


lint  prohalily  the 
erallv  understood. 


IS    tiK 


th 


orou,i;h  industrial  orjjaiiizat 


liromot'.'d  by  the  conservintj  intliience  of  a  system  of 
keeping.     A  department   for  finding  costs  must  1 


loll 

^t 


)c  sup 
xeijuiar 


ported   by   the  various  operating  departments.      I 
written  reports — the  cement  of  commercial  organization- 
are  re(iuired  from  foremen,  time-keeiiers  and  others,  froii 
which  arc  secured  the  d.ita  for  recording,  segregating  am 


distributing    the  "ex 


expenilitures 


for    1, 


ilior. 


R 


records  from  the  store 


eports    and 


s  (lepartment  maintain  a  svstemati 


and   complete   control   over   the   distribution    of 


ppli 


In  this  way  responsibility  is  fixed,  co-operation  is  secured, 
the  active  interest  of  every  employee  is  enlisted,  and  a 
criterion  of  efficiency  otablished.  I'pon  the  theorv  that 
the  person  who  lacks  enthusiasm  in  'himself  can  never 
arouse  it  in  others,  this  effectual  inter->tafT  collaboration 


is  preserved   in  the  knowledge  that   tl 


lallv 


interested     in     and     carcfi 


ic  manager  is  per- 
scrutinizcs     each 


month's  statement  of  costs.     And  the  best  of  it  is  that  bv 
■>ame  organization,  of  which  cost  finding 


virtue  of  thi 


but  a  detail,  these  result 


ts  and  benefits  are  secured  at 


tically  no  expense  whatever.     That 


hen 

maintained  at  no  increase  of  exi 


prac- 
is  to  say,  a  compre- 


sive  system   of   co.>;t-keeping   may   be  establisherl   an 


peiise   tor  clerical  assist 


ance  or  otherwise. 


tl 


le   work   .as   it   comes  into   tin 


////■    /:C  c'.VO.U/f.S    ()!■    .l//.\7.V(, 


.■n.-C(v,iiitiii-  (ltiMriiin,iU  can  lie  ^' >  iiu  tliM.h/i  il  ili.ii  the 
ivj^tilar  >iaiY  iiMiall>  iinph  i>cil  at  ilir  iiiiiu  ultui'  can  racily 
lianilk-  It,  .\>  111  li'  u  I  lalnirati'  a  piMpiT  <li»cctiiin  nl  d'sls 
can  lie  iiiaiU-,  u  can  I  ■  a>-crli.l  with  rca^  .lahlc  a'-Mirancc 
that  the  ilcvilciiiniciit  "1  a  -\.-icin  i>l'  c^-t  liinlini;  luid 
<lelii  nil  imh  npnn  the  anmnnt  mi'  .Ktailnl  ml.  rni.itU'ii  that 
can  he  n^e(l  h\  the  nianamnunt.  1  he  aeiiial  uperation 
of  a  praciu-al  sx -leni  "l'  nmie  ace  iUnt.nu;  in  etieciive 
-ervice  at  tlie  War  l'-a-;le  ami  i  iiiier  Star  'niiu-,  < -i  Iviss- 
l.-md.  !',.  (.'..  li.i->  prMM.l  ihi>.  And  ilie  .-anie  esperience 
ha-i  ilenv'ii-iraled  thai  ~nch  a  system  can  he  pertected  and 
ccinlncted  which  will  exhihit  in  ai'^niMle  (Klail,  Inun  ink 
to  interest,  the  -i  L;ri -ali. 'n  ><(  e\pi  ndiinre-^  fiT  lalmr. 
snpplii's  and  imlireci  e\pen-e-..  and  their  ileterininate 
all<icatiini  tn  eacii  and  e\er\  sni]ie.  ihit'l  ^r  nilkr  headin,L;. 
-e])arately.  in  which  w.iik  i-  in  ]nM-re--. 

This  experience  and  tin-  -taiuneiil  relati\e  tc  the  ex- 
pendimre  necissarv  [n  carry  .mt  an  elTectual  -.\  ~ieni  of 
cnst-keepin.tr  IS  stihniitted  in  the  hi  pe  that,  with  the  ed.L^e 
taken  nff  the  (itiestinn  nf  expense,  a  nmre  L^eneral  discus- 
sion of  "tiler  and  ninre  inipnrtanl  jihascs  .if  the  snhject 
will  fnllnw.  CiiAKiJ.s  \'.  Ji;nki\s. 

Rnsskand.  P..  C,  An.uMi-t  i.  iip3. 


i 

i 


MINE   VALUATION    BY   GOVERNMENT 


vl-^UtuIlai,     .\u^'lI 


Anil 


I  ill    \ari(it:s  projios 


als  I. 


I'    IMllllliJlIU 


llic  duties 


if  a  patiTiial  t;n\unnuiii.  ilir  iima  -tartliiij^  up  ti>  date 
s    tlial    wlmdi    wa--    scTiniislv    madi'    in    l.iindoii    i)v    tlie 


'rc"-uit--iit  I't  till.- 


(.  nuncil  I'l   \\  >  -t   A 


iis'.ralian 


M 


I1H-(I\VI1- 


tTS,  wlu)  sii;;f;i.>tid  iliat  a  miicral  iiis])i.Ttiir  dl  iiiini'.--  he 


•PP 


ilctl    I) 
ical  visits 


till.'    Mate 
for  till-  ]) 


'nviTiiiiuni    will) 


a    viiw    to 


irpoM'  lit   s.impliiij,'  and  (.■Iki'U- 
iiir  KVL-  ix-<r\t>  and  otiinatmi;  tlic  \aliic  nl  the  |)rn- 


du 


cinfj  mines. 


h'urthi 


rim  ire,  thi>    in>])i'eti!r   was  to   re- 


ceive a  salar\   whieh  >hiiiild  "plaee  him  l)e_\(ind  tlie  |)ale 
At    the    uRethiLr,    Mr.    11.    (_.    IhKjver 


it    temiitatinn. 


lininted   uut    the   aii-uriht\    nt    tii'. 


idea,  hut  it  seiins  ti> 
liave  hecn  takin  ^erimivK  h\  a  iiumher  dl  tlmsi  inten^ted 
m    West    .\u>trahaii   mnie^. 

The  avowed   imrposi.'  nf  this  innovation,  as  stated   hv 
Its    j)r(ipo>er.   \\;is    to   <\n    away    with    "thi'    intris,' 


lie    an< 


maniiiulatiiin 


if 


rket 


I  'perati  irs 


lor 


tl 


leir    own 


hasc  ends,   lirihe   the   (itticiT';   m    eharL;e   of   tlie   mine-   to 
work  the  hatter  in  tile  interests  of  the  marktl."  etc.      It 


must  i)e  confessed   tliat  the 


(liver<ience   t 


n  the 


esti- 


m,ile>  of  lire  re>i'rves  h\-  dilTerent   eiii;ineers.  wiiicli   has 


clKiracttTizei 


i    tl 


it    seiisa 


tional    tluctuations   in   the    sh.ire 


i|Ui  itaticiiis  iif  the  K;\lL;oiirlie  mines,  does  justify  criti- 
cism and  warrants  tlioiit,ditfiil  iMii^ider.-ition.  ()i,  several 
(jccasions  diiriiii.,'-  the  Ia>t  ten  \(ars  the  sliaie  market 
has  het'ii  rij.;j:;ed  Ii\  concerted  action  hrtween  managers 
and  ojuratcirs,  se  ne  of  whom  liave  l)een  d.irectors;  in 
part,  this  is  ixplained  li\    the  fa^  t    that   tlu    mine-owners 


)f  the  l)oOi 
iccidetitalh 


pen 

rich     iiKMi 


ii.'iM   menu 


if    1 


iiw    anteci 


ari"'  projiortion  of 
.iits.       X'.irious 


coterie.;  have  striven  in  turn  tn  iiu--t  each  ot'ier  mi  order 


W 


m 


i\ 


54 


////•.   /:c  ii>  ().\!U  S  or   MlMXu 


to  nmtrnl  llu  i.iii  >>i  |iiiMlin.tii)ii  and  S()iirc(.'>  of  iiift)r- 
nialii)ii  .11  till'  ininis.  Sfvi  ral  ititaiMDii^  rpisodt's  havf 
di.>>j;raciil  tlu-  hi-ti)i\   of  ilh    Ix.ilj^oDtiic  iniupaiiics.  and 

it  has  t\iniiir,|  iiuu  h  l;.i(m|  h.ird  W'  rk  m  ri^i"ri-  West 
An-'traliaii  nmiis  i.i  tin  |ic]>i!iiiii  .i|  it  s|nH-|,dili'  iiiM'st- 
ini.!it-   whii'li   ni,in\'nf  iIk'ii!   nnu    (ii'i'upv. 

•  >l  (-''urst',  ilu'  idc;i  oi  a  i;i 'M  rnuuiit  ni-|»xtiii,  1m 
\aliK'  the  niiiu-  a-  an  indipi'nilnn  a|i|irai--ri.  i>  \\liiili\ 
taiininl;  the  inst  i  pf  -amplntL;  lli<-  lari;c  niiins  nf  nin 
ili-tiiit  al.inc,  thai  !■',  Kal,L;i  h  >rhr,  w.aiM  iim  inio  hall 
a  nnllKiii  (l<>llai>.  a-  Mr.  iioowr  .-aid;  ilt  mii<t  tlir 
(.■Icnunt  of  liiiK'  \>c  I'l  pi -■  iiirii ;  it  wonM  takr  a  ip  ini|K  trni 
(.•n!.'iiUHr  at  Ka-l  ihr.'c  u'ar-  t.p  pin  tlip  work  tlioronj;hly 
at  l\al.L;piorlir  alppiu-,  aiipl  n  is  s.n,  i,,  va\  that  -luli  a  iiiaii 
U'Uild  ni.\iT  In-  alik'  tpi  krr|i  pacr  with  ihc  <lr\  rh  )|inii!ii 
t.lklll^   pLui-  rWll   111  a   l\\\    pp|'  till    larL;r-!    inilU-.s  ipl    W'l'-trlll 

Australia.      Mpirrpi\iT.   >uc\\  a   man.   mile--  ajip.  iinupl   lUr 
lifi'.  UppiiM  hi'  till  >|ipirt  ppf  ppplitii-al  iniriL;nc.  and  it  lii>  |)p  isi 
lippii  win-  -ate  l)i\oiid  di-nii--al  lii-  ppiwir  wpuild  liu  -lu  h 
a-    11    I-   niaphi-aliK    tpi  (Uk^au-   rxerpt    mukr   eoiidiiioii- 
f"r  wliiih  thrro  i-  no  pptlur  rnnipK. 

lint  tlnrr  i-  aiipptlur  ninvdy.  l.rt  it  hi-  rvc  iLjni/.cpl 
'li.it  it  1-  a-  nn]irpit\--.-ipinal  t'o'-  iii^iiuir-  t..  traftic  in 
miniiij;  -han-,  i-pn'ial]\  tlipi-r  of  luiiu-  iiiipKr  lluir 
inana^'. limit,  a-  it  i-  fp.r  lir.ikir-  tp)  hm  aiipl  -clI  -r- 
turitiis  fppr  ihiir  own  accp  ui;U.  i.i\r  nj)  the  idea  that  a 
man  i-  a  hritir  inana^xr  li\  hic. 'iiiiiiL;  a  stockholder : 
rccopni/e  that  hi-  jiid-iiieiit  hec.  .nie-  \itiated  l)\  lieavv 
IinaiK-ial  panieii)atiMn  ;  pay  him  Iiaiipl-p 'iiuh  ;  iMt  fpir  pni- 
U\\<:  lip  the  price  p  pt  -iiares.  hnt  f.ir  hrin-in-  the  cpi-t- 
<loun;  and  when  tin,  ha-  hien  d(pne,  turn  rpiinipl  tpi  head- 
(|iiarter--  ami  till  the  direetppr-  that  tlu  \  are  nrp-'-L;  when 
tiicy  j;ainl)le  in  tlu  -hare>  of  the  epinipanv  who-e  trus- 
tees they  are:  lei  them  puhli.-h  all  infpprma!Mn  fip  in  the 
mine  promptl\  aiul  lu  fore  tlie\  n-e  it  f.  ir  their  piwn  ad- 
\antai,'e;  kt    it   he  hem  ath  a  plirectpir'-   plii^nitv   to  sneak 


Mixr.  r.uj'.rrinx  nv  coi-i.rxmi-x r 


.•ii-'Uiiul  llic  rMimr  with  a  hi:  of  nftirial  iiil'ornialii  mi  ])^■- 
fori'  il  1^  !'■  iriiiall\  |nil)li^!ifl :  aii'l  tlicn.  a-,  a  liiial  sti|) 
cali'iilali'l  tn  It  ~-('ii  tile  \aL;arii  V  .if  hit  t-^iiinatrs,  iK  I't 
(liri'i'ti  1I-,  wliii  h.iw  li.iil  ^iii'lit  Kill  cNiH  riiiuc  in  the  Imsi- 
IK'SS  iif  niiniiiL,'  to  Ik  ia|ial)lr  .if  (.-11111  jsini;  c  ,n;|Htriit 
liianaL:.ls  jnd  (if  -iipiiorliiii;  tli.  111  InwilK  when  muT 
chnsciK  Tlii.  v\j|l  In-  imu-h  (luaiur  than  the  app'iint- 
nu  nt  111  the  iinpiis^iliK'  iitVuial  sn^Lrcstcil  1)\'  the  I'rcsi- 
(Knt  ni"  the  liinncii  of  Wot  Australian  MiiiL-i  iwncrs. 


«  i 


IN 


:tt!| 

m 


COST    PER    TON    AS  A   BASIS  OF   MINE 
VALUATION 

By  R.  LiiL.MAN  Bruwn. 

( AuMu>t   j(^   lyj  I 

llarclls  sccuiul  in  iniportaiiLC  tu  tlic  dctcrniination  of 
value  iKT  tun,  by  careful  and  s_\  stcniatic  sampling,  is  the 
(kterniinatinn  of  cust  per  ton  from  tlie  mine  accounts. 
The  object  of  sampling  lias  been  atta'ne<l  when  the  gross 
valuable  content  <n  the  ore  exixjsed  in  the  mine  has 
been  determined.  Ihis.  for  the  sake  of  convenience  in 
sulise(inent  calculation  is  usually  reduced  to  value  per 
t"n.  Ironi  this  ,L;ro>s  \alue  ])er  ton  must  be  deducted  the 
total  cost  per  ton  and  the  loss  per  ton  in  treatment,  tiic 
remainder  being  the  net  value  ])er  ton.  Obviously  an 
error  in  cost  per  ton  is  just  as  im|)ortant  as  an  error  in 
gross  value  per  ton,  so  that  it  is  nt  ary  to  exam- 
ine with  as  careful  s^TUtiny  the  method  of  obtaining  the 
one  as  of  the  other.  Se\-eral  ])it falls  have  been  pi  d 
out  recently  in  the  columns  of  this  Jch'H.nai,  which  will 
be  ignored  in  tli's  present  article;  or,  ratiier.  they  are  as- 
sumed to  have  bei-n  satisfactorily  avoitled,  the  desire 
being  iku  to  obscure  another  factor  in  valuation  which 
ha  ^  iieen  touched  ujjon  but  lightly,  if  at  all. 

It  is  not  intended  in  the  present  article  to  go  into  the 
(Kiails  of  mine  accounting,  but  it  will  be  assumed  that 
in  some  way  or  other  ihe  enLiineer  has  obtained  ci  tain 
seL;re,L;ated  totals  represeniing  the  expenditure  during  a 
cer'ain  piriod  in  the  various  opeiations  connected  with 
mining  and  beneticiating  the  ore.  and  that  the  simi  total 
of  these  segregated  accounts  represents  the  total  cost  of 
operations   for  the  period  in  (|uestion. 

It  is  usual  to  divide  these  segregated  totals  by  the  tons 
of  ore  trcited  iluring  the  -^ame  period,  and  to  call  the 
(|uotients  the  cost  per   Ion   for   the  various  departments. 


BASIS  OP  MIXE  I'ALUATIOX 


111  a  certain  sense  the  sum  of  these  is  a  cost  per  ton, 
thiiuj:;h  not  prupirh'  to  he  considered  the  cost  per  ton, 
as  the  result  is  rather  a  hazy  approximation  representing;, 
perhaps.  averai;e  work  for  the  mine,  liut  not  sufficiently 
definite  to  he  used  wiili  contidence  in  the  delicate  work 
of  valuinj:;  ore  reserves. 

Let  us  assinnc  certain  natural  divisions  of  the  accounts 
into  stopiIlJ,^  develipmenl,  reduction  and  j^eneral  ex- 
jjcnses.  All  tho  sei^reRations  can  he  easily  grouped  under 
tiicse  headings;  and  this  would  naturally  be  done  in  the 
process  of  arriving:  at  the  c(.st,  in  the  manner  to  ho  tle- 
scrihed.  In  the  inexact  method  commonly  empl(\ve(l, 
these  totals  would  all  he  divided  l)y  the  same  tonnage — • 
prohahly  hy  the  tonna<;e  reported  from  the  mil!  or  reduc- 
tion works,  whereas,  tlii-  would  i^ive  true  results  only  for 
the  last  two  items,  namely,  reduction  and  general  ex- 
pense. l'"or  sloping,  the  result  might  he  a])])roximate  ex- 
cept in  the  case  of  a  mine  carrying  a  considerahle  amount 
of  ore  in  the  stopcs.  I'or  development,  it  could  give  the 
true  value  onlv  when  the  >;mie  amount  of  ore  is  stoped 
as  is  developed  during  the  period.  If  development  falls 
heliind.  the  result  per  ton  would  he  too  little;  if  it  ex- 
ceeds the  output,  it  would  he  too  much. 

This  is  the  general  statement  of  the  matter,  but  it  can 
he  made  cl'are.  by  considering  a  concrete  case.  It  is 
proper  to  say  that  this,  though  based  on  practice,  has  been 
elaborated,  with  the  assumption  of  certain  values,  to  suit 
more  general  conditions. 

The  period  is  12  months. 

Tons  treated,  30,000. 

Total  return  per  ton.  $5.26. 

Total  loss  per  ton.  ri4c. 

Total  gross  value  per  ton  in  ore.  $5.00. 

Herewith  are  given  in  tabulatcfl  form  the  costs  of  the 
various  departments  and  the  costs  per  tun,  as  commonly 
calcidated : 


..s 


rillL  ECOSOMICS  UI-   MIM.W; 


m^ 


^i 


Tntal. 


■"^I'^piiiR    $5S.ooo 

DtvcUipmciit    50,000 

Dl-dlKtliJll     CIJ.OOO 

GoiKTal  i'xin'ns(.s   _'j.ooo 


Total   

Tlio  foUuwins. 


^JJJ.OOO 

tonnages  are  also  given : 


Per  tun 

basis 

■■1     tMllS 

$1  .  16 
I  00 
1.84 

■+4 
$1.J4 


T..n., 

(Jrc  broken  in  llic  -tiipi-^ 10.000 

Ore  siaiuiinK,  blocki-il  mit.  ready  for  bri-akiiif,' 100,000 

Ore  rcasoii.ib!;-  expected,  but  partly,  if  at  all.  developed..     50.01K) 

'I'ulal    l()0.ooo 

'1  hese  arc  tlic  (|iiamities  assumed  to  be  found  by  the 
engineer  on  iiis  invL>tigatinii  of  the  property,  and  the  re- 
coverable value  per  ton  will  be  taken  at  the  average  of  the 
pa^t  year,  which  we  will  assume  to  have  been  determineil 
to  be  the  fact  by  careful  sam])ling.  The  most  natural 
way  of  calculating  the  value  of  these  reserves  would  be  as 
follow  s : 

Total  recoverable  value  of  ifio.ooo -tons,  at  $526 $841,600 

Co.sts  on  i'x),ooo  tons,  at  $4.44 ;io.400 


.Apparent  proia   in  reserves $i.?i,2CX) 

Ibis  is  manifestly  incorrect,  otoping  ami  development 
should  not  be  charged  against  ore  already  broken,  nor 
shciuld  development  be  charged  to  that  standmg  blocked 
out  and  ready  for  stojiing.  The  estimate  should  read  as 
billows,  assuming  the  figures  for  cost  per  ton  to  be 
C(  irrect : 

lo.txjo  tons  broken  in  stopcs.  at  $.'  28  per  ton  for  milling 

and  general  expense $22,800 

roo.rtxi    tons     developed,     readv     for     sloping,     at     $344 

($i28  +  $l.i(,)    :...     34_,,ooo 

S0.0(>()  tons,   reasonably   exyiectcd.  but   not   doveloped,   at 

*-t  44    222.000 


Total  costs   S5H8.SOO 

Uio.ooo  tons,  recoverable  value  as  .ibove ,S4i  (kx) 

^'*;t_  I'r"!its    2.S2!soo 

The  cause  of  the  great  ciitTerence  is  t)bvious.     It  sin  mid 

be  noted  that  in  the  accounts,  transportation  and  haiuUing 


B.ISIS  OF  MIX  I,   r.UM.ITIOX  r,!t 

costs  are  assuiiu'd  to  belong  in  general  expenses.  TiiL' 
above  figures  must  be  taken  as  tliruwn  in,  apart  fmni  the 
fuiulainental  matter  with  whieii  this  article  openeil,  and 
they  contain  errors,  as  was  indicated  in  our  opening  lines. 

Reduction  costs  and  general  e.xpinse  are  properly  re- 
duced to  the  per  ton  basis  by  dividing  bv  50,000  tcin>.  l>ui 
stoping  anil  development  cannot  properly  l)e  so  rcdui-ed 
until  we  know  whether  50,000  properly  represents  the 
tons  sto])ed  and  the  tons  developed.  In  what  follows  we 
are  using  some  (|uantities  that  an  engineer  examining  tiie 
property  can  scarcely  have  C(Mne  at  directly,  ami  indeed 
he  will  be  fortunate  it  he  has  them  at  all ;  but.  rectignizing 
their  importance,  by  iiKpiiry  and  estimate,  he  must  arrive 
at  some  sort  of  a  probable  value  for  them. 

We  have,  as  a  general  proposition,  that  the  actual 
amoimt  of  ore  broken  during  the  year  is  e(iual  to  tlie  ore 
on  hand  broken  at  the  end  of  the  year,  plus  the  ore  treated 
during  the  year,  and  minus  the  ore  on  hand  broken  at  the 
beginning  of  the  \ear,  in  the  same  way  the  ore  devel- 
oped during  the  \ear  is  e([ual  to  the  ore  blocked  out' at  the 
end  of  the  year,  plus  tlie  tons  of  ore  broken  during  the 
year,  and  minus  the  ore  standing  blocked  out  at  the  begin- 
ning of  the  year.  Applying  this  to  our  concrete  case,  we 
will  assume  the  following  values  for  tonnage  at  the  be- 
ginning of  the  year : 

Rrnkcn  in  tlie  "stopcs 20,000 

StaiuliiiR  l)lockc(l  nut Ijo.ooo 

Reasonably  expootecl   6o.oo<i 

Ten  thousand  tons  plus  50.000  minus  20,000  etpials 
40,(XX).  which  turns  out  to  be  the  actual  ore  stoped  during 
the  year,  so  that  the  true  cost  of  stoping  per  toti  is  58.000 
divided  by  40.000.  eipials  $1.45  per  ton.  In  the  same  way 
loo.fxXD  plus  40.000  minus  120000  equals  20.000  tons, 
the  actual  ore  developed  during  the  year;  and  $50,000,  the 
tiital  spent  on  the  de\elo])ment.  divided  by  20.0<;x)  tons, 
e(pials  $2.50  per  ton.  the  true  cost  of  developing  a  ton  of 


cd  ////•:  i-.coxiuins  ui-  mimxc, 

ore.  IiKiNimich  as  no  costs  arc  credited  in  tliis  discussion 
to  tlie  ore  reasonably  exiucted.  we  need  nut  carry  tins 
further.  tluiuf,di  tlie  same  reasoning;  would  Imld  in  rcjj;ar(l 
to  it.     Collecting  our  true  cost  per  ton,  we  have  ; 

StopillR    ^',  -o 

I  )cvelc  ipiiK-m    -  ■  i;  ^ 

Rciluctii'ii    ■_ 

(u'lu-ral  iNiR-n-c-    "" 

Cii villi;  llic   till':  Intal   cci-t  in  r  tun  at $<>-3 

This  -hi.ws  that  the  ore  at  this  mine  will  not  actually 
pay  expenses  for  handlini;  unless  greater  economies  can 
he' practiced;  whereas,  our  first  calculation  gave  a  profit 
per  ton  of  aliiiut  8oc.  To  a  certain  extent,  then,  the 
matter  concerns  the  mine  manager  as  well  as  the  examin- 
ing engineer,  though  it  is  in  the  interest  of  the  latter  in 
particular  that  this  article  vvas  prepared. 

Proceeding  next  with  the  valuati<in  of  ore  reserves,  we 
repn.iluce  our  earlier  figures  with  the  corrected  costs  in- 
tn  (luced  : 

lo.ncx'  t,,ii.,  l,r.il<on.  at  $->  -'."^  l"r  mn •  •  ■  ■  •  $-'-;.8x) 

Kio.i      .    Ion-,    (Irvi'ldiKil.    ready    fcir    brcMkinf,',    at    $3/3 

I  jj  jS  -  S I  45  )    lurti'ii ^ 37,^'C;JO 

50.CXX1  t.'iix  ,,n.-,  rc.i-Diiably  expected,  at  $(iJ3 3"-500 

•Pclal     $707,300 

RccovoraliU-   value-,  as  ali.ivc S_ii.(kX1 

Nvt  valiK-  i.;i  the  rcM-Tve^ 134.300 

111  order  li>  lay  the  whole  matter  nmre  clearly  open  and 
even  at  the  risk  of  heing  tedious,  it  is  worth  our  while  to 
make  another  assumption  regarding  tonnages  at  the  be- 
ginning of  the  jieriod,  as  lielow  : 

Broken  in  tlu-  -t..pc ^""'^■ 

SlandiiiK   rcad\    !■  'V   brvakii 80,000 

The  tonnage  and  cost  per  ton  follow  in  summary : 

'InniiaKL-  Cost 

f,>r  yiar.  per  ton. 

StoniiiK    'xi.ooo  $097 

UfV<-l..pnK-nt    ^-"^-^  "  ''-. 

Reducii'iii  .and  Kvncral  expense,  as  lietiTc 50.000  ^.-m 

Total    $3-87 


B.ISIS  OF  M/Xli  VALUATIOX 


01 


On  this  l)asis,  tlic  \aliK'  nf  the  ore  reserves  is  : 

lo.ocw  tuns,  lirokfii  iii  ■-tiiiH-^.  a-  iH'fore $_'2.8tio 

loo.ooo   tons,   ready    fnr   >ti>))ini;.   .it   $325    ($228  +  070  ) 

piT  ton    325,000 


50.000  tons  ore,  re 


asonalily  to  l)c  expected,  at  $3^7 


193.500 


Jtal   charnes    $.Ml..V!0 


The  trross  recoverabli-  v.iUu'.  a^ 


ln'fore 


rolits   ni    ri'strves 


Th 


le  (htfireiiees  >h(i\\ti  chneh  tiie  siateiiie 


til 


S4I.(«X) 
300.300 

L'tit  with  which 


th 


1;-  ])aper  1  'i>i'iie( 


A 


s  a  siimni;ii\  nt'  the  ;'.linve  tliere  arc  two  general  prin- 


ciples til  l)e  eimneiateil 


(.■\)     (,'nst 


JUT  tun  IS  the  (|nntieiit  ol  tntal  d 'st  divu 


led 


hv  the  aeiiial  tdimaoe  re-iiltinj^  imni  that  e\pen( 


litiire. 


(  r. )     Net  valtie  ; 


ler  tun  i>  tlie  "ross  rec  iveral)le  value 


]ier  tini.  less  est  pt  r  t.m  for  those  nattiral  (livisi()ii> 
tile  wi'rk  still  to  he  ])erl'oriiiefl  U])!)]!  the  ditYerent  clas 
of  ore. 


o 


f 


.\lth 


the   ahove    prineiples    are    fundamental,    like 


11  i/cneral  stateiiieiits  tlie\   niae  easih   he  pre: 


to  ex- 


ift 


uiei-r,  alter  analvsis  o 


if  the 


treines,  and  it  is  for  the  enj, 
situation,  to  decide  the  particular  extent  nf  their  ajijiiica- 
tion;  a  failure  to  reco.t:^nize  them  at  all.  on  the  other 
hand,  tnav  invalidate  the  conclusions  drawn  from  other- 
wise reliahle  work. 


^ 


Tit 

I 


i 


iWliNE    ACCOUNTS 

(AnRiist    J.),    191,5.) 

I  he  Editor: 

'"^IK — Ilk'  (.■niui.M'  and  iTcaiiiy  iironiuu.,111  of  the  1111- 
piiriant  Miiin'ct  .1  },'iihl  iiiiiK'  arc(iiiiu>  liy  Mr.  11.  C. 
IIddvit  in  a  wwm  iuuhIilt  uf  tlir  jm  rnai/  k'avcs  inc 
little  clianci  i.i  ^11  a  ,L;(i(.(i  Imld.  I'.ut  the  nccu^ily  fnr 
(lisi-us.-.i(in  cif  an  i.^.suc  nf  >iu'h  vital  niuiiK'nt  to  the  nniniij.; 
indn.stry  luad^  nic  to  vonturc  sniiii.'  Cdutrihutinn  at  this 
jinicti.. 

Mr.  lliKiwT  <iMi>  M'liman  survici'  li\  .-luittiii^  olY  at  tiie 
iintsi-t  till'  pmrilc  piva  nf  diversi.'  cnnditiniis.  which  has 
t(»)  111'tt.n  hern  tlk'  (.-xrusi.'  icr  such  wouful  cliaos  as  j^ructs 
till.'  invr>tii;atiir  wlicn  he  l)eL;ins  to  attempt  tlie  arranj^nni,^ 
of  actual  methods  into  xnne  show  of  sy>iem.  'riie  difticiil- 
ties  in  the  way  of  imiformily  lie  mainly  in  tlieory  and  ni)t 
HI  practice,  arisiiiL^  not  from  varyin.i^  conditions,  so  nnicli 
as  from  lack  of  method  or  of  clean-cut  ideas  concernini;' 
the  ends  to  he  sought  in  s\  steius  of  account.  I  presume 
that  many  engineers  will  >nnle  at  this  statement,  at  first 
}.;l.'ince,  liecause  there  can  he  no  serious  ditYerenci  of  opin- 
ion amoiif;;  well  trained  luemliers  of  the  ])rofession  as  to 
what  ou.i^lit  to  l)e  shown  hy  the  books.  15ut,  imfor- 
tnnatily.  the  enforced  examination  of  the  accounts  of 
many  toiuipanies  proves  to  the  writer  the  very  inade(iuate 
manner  in  which  the  expected  information  is  ohtaiiiahie. 
save  in  excejjtional  instances. 

.Mr,  Ihover  la\ -^  d  iwn  three  methods,  or  principles, 
which  should  u;  'Vern  a  proper  -v,tem  of  accounts.  In  my 
own  practici',  I  haw  al\\a\s  reconniu  iided  '-ncli  nii'asnres 
as  would  eiisuri'  these  same  result-,  hut,  perhaps,  from  an 
atlitudi'   n.  t   exactlv   similar, 

I.  ••7o  pvi'iriit  fraud       *     *     *     ^,„j  to  carry  conznc- 


l'..,i;c  44,  July   II,   1903. 


.i;/.\7:  .u'coi'xrs 


63 


ticn  of  honesty."  'I'liis  practically  rri|iiiri's  the  kcepins:; 
of  all  ri'ccrds  and  liic  siniitiiariziiif,''  of  tlu'  .saiiu'  ri  >ticli 
inaniKT  as  to  (.■ii>iiit  adiiiuaii'  rlu'ckini,^  of  one  ofUfcr  1)\' 
anoiluT.  This  not  onl\  L,'narils  against  frauihiKnt  intent, 
hut  it  also  protects  servants  hy  verifyiiiL,'  their  rieords  he- 
l'(jre  the  opportunity  to  correct  possihk   errors  lias  p.issed. 

2.  "To  sllo\'  ixpcnditurc        *         ♦         *         „,,    viu/;,-    itiiit 

basis,  etc."  ihis  iniportatit  eii<l  can  he  acconiplisl'.id  only 
hy  tile  III  st  detailed  accumulation  nf  data  from  all 
sources,  and  this  '-  the  directioii  in  which  looseness  is 
most  commonlv  (iiscerne<l.  Discrepancies  ari>e  not  so 
much  from  misconception  or  'itTereiices  of  opinion  on 
methods  >  t'  seL;re,L;ati'  n.  as  from  inal)ilit\'  to  comprehend 
the  correct  iirinciples  underlying''  mine  aeeounts. 

3.  "To  he  presented  in  siieli  ci  :e.;y  lluil  the  owner,  di- 
rector, sluireli<ilder.  or  ■;elhit  not.  lUiiy  *  *  *  determine 
soinetliini^  oj  the  et'tieienev  of  the  inivnii^cr  himself." 
Here  is  a  suhject  which  demands  careful  handlinj;'.  The 
i)est  system  of  accounts  for  a  ,i;iven  hii^mess  is  one  capa- 
hle  of  viel<lin<j  minute  cost  analyses  at  the  li.ind  of  an  e.\- 
])ert.  hut  at  th^'  same  time  adajited.  to  comprehensive  sum- 
marizing for  home  office  use.  Some  comiianies  sacrifice 
everytliinsj  else  to  fancied  econome,  hy  ^atherin^  only 
totals  in  the  accountant's .hiioks.  tin  renderini,''  \ery  diffi- 
cult the  task  of  analyzinjj  costs.  (  )t;  he  otiier  hand,  not  a 
few  aceunndate  details  in  such  iieterciiienei  lus  fashion  as 
to  make  it  impossihle  to  readily  obtain  i^rouped  footings 
when  required.. 

The  llritish  system,  if  we  may  proj)iTly  a])])ly  this  tirm 
to  anythiiifx  at  all,  has.  I  think,  develojied  a  niorhid  ten- 
dency to  extrenu'  simplitication  of  the  ij^eneral  leds.^^'er  ac- 
counts. Mr.  Xicol  iirown  has  linallv  evolved  a  plan  hy 
which  four  main  accounts,  with  ehietly  annual  .ir  month! v 
entries,  carry  nearl\'  all  of  the  husiness.  in  lumj).  l'>ut 
this  necessitates  a  voluminous  and  e^ 'ni|>licated  svstt'in  of 
sc!ie(lules  to  lie  m;ide  up  from  departmeni.al  report>,  ,tnd  in 


M 


-I 


St. 


t;j 


77//;  I:C().\\>MIL'S  ()!■  MIMXU 


nianv   rcspi'ci,-  tlic   >cliemf  is   nmrc  ciimlicrsijme  than    is 
accvptahlc   to  AiiKrican   iisaiii'. 

In  Mexico,  a  plan  (kviscil  for  ilic  Lonipania  Metal- 
hir^ica  and  ni  n.-t.-  t.-l>c\\li<.rv  ni  that  country  ni  more  or 
less  nio:litieii  lonn,  has  features  whieli  overeoiiic  some  of 
the  objections  to  the  I'.ritish  st>le.  Hie  princii)le  is  to 
carry  on  the  i;cneral  ledger  a  moderate  number  of  promi- 
nent accounts,  to  which  totals  are  posted  from  journal 
and  cash  book,  usin.i,'  a  subsidiary  leil,L;er  to  '  'ke  ii[)  item 
ized  se^'rei;ations  which  may  be  specialized  i  any  extent 
deemed  d( -irable.  With  this  system,  the  accounts  are 
numbered  serially  ami  all  employees  concer  led  are  pro- 
vided with  printed  books,  '/w'mii  the  complete  classitica- 
tion  by  numbers  and  titles.  In  adapting'  it  for  use  in  one 
instance,  we  have  arrant;<-'d  the  i^eueral  ledger  to  furnish 
information  ordinarily  liable  t<i  be  retjuired  by  the  home 
office,  which  receives  the  monthly  trial  balance.  A  quar- 
terlv  report  of  audit  of  the  books  aLso  goes  tn  the  home 
office,  with  an  analysis  of  costs,  made  independently  by 
the  consulting  engineer.  The  subsidiary  ledger  furnishes 
the  materia!  at  once  itir  such  analysis.  I'.ut  the  imi)ortant 
point  with  this,  as  with  any  system  of  accounts,  is  the 
manner  in  which  the  records  are  kept  and  assembled  for 
entry  in  the  accountant's  books. 

i  do  hol  know  that  it  is  fair  to  talk  of  an  American 
svstem  of  mine  accounts,  only  we  may  note  the  trend  of 
practice  in  the  rnited  States  to  be  toward  labor-saving 
devices  in  b'lok-keeiiing.  'Ihe  ..tandard  card  systems, 
filing  cases  and  automatic  ilevices  are  mostly  flexible  and 
well  ailapted  to  the  gci'hcring  of  data  and  their  preserva- 
tion in  convenient  for.n  of  study.  lUit  comparatively  little 
has  thus  far  been  done  towards  applying  these  aids  in 
mine  accounts.  The  writer  has  used  such  appliances  for 
several  years,  under  a  variety  of  conditions,  and  always 
with  success.  The  real  work  consists  in  preparing  the 
forms.     After  that  tin    svstem  almost   works  itself,  and 


MIXl:  .iccncxTS 


65 


t'Vfii  prejudici'il  lur-'  iis  scuii  coiik'  to  esteem  tliu  incllii><] 
and  to  operate  it  \sitli  keen  .sati^lactinn. 

If  it  be  possiljle  to  formulate  a  standard  s\steni  of 
accounts  adaptable  to  all  needs  and  so  planned  as  to 
give  comparable  results  as  between  different  operators 
I  take  it  that  some  agreement  must  be  reached  regard- 
ing a  number  of  [XjiiUs  on  which  practice  now  differs. 
These  matters  once  adjusted,  it  would  be  wise  to  pre- 
pare a  skeleton,  which,  on  broad  lines,  should  be  very 
simple  and  compreiiensive  in  its  segregations.  Iiacli 
main  division  ought  then  to  be  divided  and  sub-divided 
to  give  operators  free  choice  of  subsidiary  accounts. 

What  are  known  as  Capital  accounts'  over  sea,  as 
distinct  from  cost  and  revenue  (profit  and  loss)  ac- 
counts, have  not  been  as  clearly  defined  in  American 
practice.  This  is  due  (i)  to  differences  in  tax  collectors' 
methods,  which,  on  this  side,  are  variable  and  rarely  in- 
trospective; (2)  to  the  difference  in  attitude  of  home  and 
foreign  investors:  {  j,)  to  ditTerent  methods  of  stock  dis- 
tribution here  and  there,  and  (4)  to  rigid  auditing  abroad 
and  the  sad  lack  of  it  at  home.  These  items,  however, 
need  only  be  stated  as  causes  historical,  and  not  as 
raisniis  d'ctrcs  in  the  premises.  Moreover,  Mr.  Hoover 
appears  to  have  found  his  discordant  elctucnts  largely  in 
a  country  which  is  supposed  to  set  the  pace  for  us  to 
follow,  for  there  is  no  doubt  that  the  liritish  ideals  are 
beyond  and  above  us  in  their  appreciation  of  the  value 
of  accounts.  Once  let  the  spirit  move  us  to  'get  to- 
gether' in  the  matter.  1  venture  the  prediction  that  we 
will  evolve  a  svstem  less  cumbersome  and  unwieldy  to 
accomjilish  the  end  in  view. 

Duly  crediting  Mr.  Hoover  witl.  the  original  sugges- 
tions that  the  Institute  of  Alining  and  Alelallurgy  and 
the  American  Institute  of  Alining  Engineers  appoint  a 
ioiiU  committee  to  fornuilate  -onie  plan  of  working  cost 
statements,    after    discussion    of    the    subject,    1    would 


•'? 


1: 


e. 
Si 


Si  I 


C6 


////:   r.COXUMICS  Ol'   MIMXtl 


\v\n\\Tv  to  siifj'jjf^l   ri   II 


lilu 


prop. 


as    |(illnw> 


\xl  ilu-  In-tituic  <>l  Mining;  ami  Ak  talluriiy  and  thr 
lii.-tiliilii'ii  (if  Miniiif,'  lini^iiKiTs  ai)])nint  a  joint  coiii- 
iiiitttc  of  till  (live  from  c';k1i  organization  i  to  ait  a-  a 
r.riti.sh  hiilj-Loinmitttc  to  corroiioml  and  colkit  (luali- 
tk'd  opinion^  from  tliiir  nund)i.Tsliip,  an  1  to  clas>if_v  tin.- 


anie.  witli  ricoinnu'iulations. 


Let  i; 


Aiuciican   lii>ti- 


tuio  of  Mininj;  I'.n^inccrs  appoint  a  similar  committi^ 
of  till  to  act  indtpciuhntly  on  this  side  in  the  sanu' 
manner  and  uiili  a  similar  purpose.  After  a  iriveii  jie- 
1   of  deliberation,    let    each   committee   o.    ten    select 


rio( 


iriiin  Its   iiwn   iikiii 


I.er>l 


lip    t\\(i   ]ii 


ersons   to    i.^-n   a   new 


opin 


littce  of  four,  to  Ije  charged  with  the  duty  of  devel- 

com- 


^  a  plan  from   liie  final   rcpor's  of  the  larger 


mittees. 


Meanwhile,  the  free  discussi^ 


)f  tht 


II 


its  bearings  need  not  be  restricts.  '  in  any  ( 


bject 

Icgree. 


I  respectfully  submit  this  first  draft     f  a  plan    vvliicl 


:n 


niav  well  be  nioditied  in 


detail 


IV  wiser  heads. 


lie  prin- 


ciple of  the  idea  is  one  which  might  also  be  npplied  to 
many  other  topics  ui  interest;  and  the   fact   mat   many 


mining  engineers  are  now  euro 


lied 


111  the  respective  insti 


tutions  on  both  shores  suggests  the  propriety  ot  estabhs 


ral 


iiig  one   or   more    j"    it    >tanding-committees  on   gene 
issues. 

In  the  United  States  we  have  not  been  accustomed 
to  draw  the  somewhat  arbitrary  distinction  which  is 
made  abroad  between  'gold  mine  accounts'  and  mine 
accounts  in  general.  The  former  reipiire  in  reality 
but  the  simple  fiamework  about  whii  li  may  be  built 
up  the  more  complicated  systems  rendered  necessary 
by  products  reqti  ring  amplified  processes.  lUit,  if  the 
necessity  exists  for  standard  sprciilntions  in  the  one 
case,  so  nnich  the  more  are  they  called  for  in  the  busi- 
ness of  mining  and  treating  complex  ores. 

The  differences  in  modes  of  writing  up  particular 
items,   as    mining    development,    etc.,    with,  "ther   varia- 


MINP.  ACCOrXTS 


(>7 


tiiiii>  ill  praciuc  iiuiili  )iu «1  l)y  Mr  Iliiivir.  uIm  tlu 
qiK'stions  raised  by  your  Lumloii  C' irrcsiKiinlciU.  in  an 
•irticK-  HI  till'  sa^iiu'  isiR'  ni  tti(  Joi knai.;  all  serve  to 
show  the  present  lack  of  uniformity  in  method.  To 
soMiO  extent,  it  mav  1)(  feared  that  Cdrrespondinj;  dis- 
crei)ancieb  in  purpu>c  ni.iy  also  be  iliscei  nible.  I  can 
(iiilv  add  at  t'ii~  writing  ihat  my  nwn  ])rai'iit<.  lias  en- 
countered somewhat  equivalent  diver>ity  of  need  in 
varying  circumstances.  l!ut  the  jijeneral  plan  which 
covers  the  systems  adopts. d  is  susceptible  of  adjustment 
to  these  several  requirements,  and  the  books  of  any 
corporation  using  the  method  will  yiehi  cost  analyses  of 
a  typical  form,  however  much  the  details  may  thus  be 
modified.  Whether  the  particular  type  form  is  the  best 
for  all  uses,  and  how  nearly  this  plan  will  approximate 
til'  standard  to  lie  liiially  a<lopted.  are  ver\  open  (jues- 
tions.  It  is  t  »  be  hoped  that  the  whole  subject  will  be 
amply  discussed  with  a  view  to  the  eventual  ad  iption 
of  definite  standards  by  the  profession  at  larf,;e 

Til '(I.  1.   Com  STOCK. 
Los  Angeles,  Cal  ,  .August  14.  1Q03. 


tt 


I 


■  • 
Mi 


'  Thp   P.Tvment   of  I",xtrn=ion-   of   \f)ninR    Pl.-nt  Out   of   Reve- 
nue,' by  E.  Walker,  this  Journal,  p.  48,  July  11,  1903. 


1 


ORE-BREAKING  AND  SORTING  ON   THE 

RAND* 

Bv  li.  S.  Uennv. 

(Scliti  TlhiT     1';.     i'>",i  ) 

111  all  iIk  iumu,  (jh  tln'  Kaiicl  llu'  nrr  i)'-l'cirf  hrmi^ 
sent  t"  till'  Mirfacr  IS  ir-uIaU'il  tn  a  nrlaiii  iiia\iiiimn 
^;aiii;f  li\  an  arraiit^ciiKiit  "i  ^'v/a\u^  liars  t'i\ril  mvit  tlio 
stalidii  i.iii.--  at  the  shafts.  ['hv  dliji-ct,  pi  iiiiaril\ .  is 
til  n.tlin.1.-  llic  iarj.;i.st  jiiixH-.s  nf  ore  Ici  siicii  a  i;au.i;c 
tliai  tluTi'  will  he  111!  lial)ility  to  clioke  tiic  oiitlLt  from 
tlu  liiii;  hilt  It  -serves  al.vj  tlie  seeomlarv  ami  euiiially 
iin])nitaril  imrjiose  of  jirevemniL;  roeks  ,  if  too  great  a 
si/e  fioiii  i)a>>iiig  tu  the  ore-sortiiig  iiouse. 

1  lie  ore  when  delivered  at  the  .surfaci  is  usually  clas- 
sified into  'tine'  and  'cnarse  rnek'  'i>  dnni|iing  the 
skiiiload  onto  a  grizzly  in  the  headgear;  tlu  fine,  hcing 
nnsortahle,  go  direct  to  the  mill,  and  the  coarse  ore  is 
seiu    to   the   soiting   h'Ulse. 

The  rock  in  the  sorting  hmise  is  siihjccted  to  scrutiny 
either  on  lloors.  revi  living  t;,hle>  or  traveling  belts,  and 
the  rejected  waMe  gees  to  the  (himii.  rile  sorted  ore  IS 
fed  into  eire-hreakers  for  fiirtlur  rediu'tioii. 

The  breakers  may  be  classitied  into  two  generic  types, 
the  gvratory  and  the  crank  motion  type,  the  former  be- 
ing largelv  reiiresinted  by  the  dates  and  the  latter  by 
the  r.lake  machine.  I'^ach  tyjie  has  its  supporters,  but 
il  is  geiierallv  considered  by  the  moderates  that  the 
fi'mur  is  the  belter  m;ichine  when  niiit  capacity  is  de- 
manded, and  the  '.-itter  when  miillipli-ation  of  machines 


*  .Mi-lr.ict  from  ..dv.nncc  sheets  of  paper  entitled    'Ob-iervation^ 

on  die  .Melal!iiri.'K-al  Practiee  of  tlu  Witwalersran.l,'  by  II-  S. 
Denny,  read  before  tlie  C'lienuc.ii.  .\Ktalliiri;ieal  and  Muiini;  Soci- 
etv  oi  .South  .Africa. 


o K i:-n Ri: .iki.xi,  .imj  s < ) r ti.\g 


GS) 


is  lint  I  iiil)arras>iiiy  In  llu-  }^i  ikimI  iU>i^ii.  ;is  its,  niainlf- 
iiaiicv  i.ii.--t  i>  ks>. 

.It.'  f^iiural  xMpi  I'l  till'  n  !iK  liiiaki  T  i>  id  rcdiK'c  t'.U' 
(.n  HI  ahoiit  a  _>  iii.  cu\>v  lulnrc  ili  lui  riiijj;  to  ihc  mill. 
Iiut  llic  avira^i  in  Uk'  iiiiil  liins  ^viU  l)c  tMiiinl  l" 
ixcxi-i!  tlii>  j;.iu^;r.  (iuuij;  In  u>.ii  in  tin.  (  r'l^liinf,'  par;  ><i 
the  lircikvr.s.  In  llu-  nir^i  ri'init  practiiX'  il  i>  v<.-c>i'^- 
ni/t(l  tlril  tluTr  i>  an  aiKaiita^^f  gained  by  Milijectin^ 
till.'  <iri'  to  a  pnliiiiiiiars  lirrakiii;;  that  is.  to  ri'ilmrc  it- 
MZ',-  lu'l'iirc-  pa>sin^  it  to  'lu  -utinj;  liuw.sc-  in  order  that 
llurt'  nia\  hi.'  iIumt  iinifMiiiiit)  in  tiK'  -i/,i  s  of  tlir  iiicvcs 
of  oil.'  iliat  arc  -nWjutid  to  tin    sortin-  o])'.Tation. 

It  i>,  1  tliink.  doiilitfiil  wluiliiT  llu-  jiractici.  of  ore  rc- 
diKlion  ill  br'.ak(.r>  is  carried  siitVuRntls  far.  It  would 
appear  tliat  a  material  iturcase  iiia>  Ik  olitainetl  in  ilie 
^taInp  duty  if  tliere  were  a  succession  of.  say.  three 
breakers,  tach  reducing  the  ore  to  smaller  gaup'  'ban 
the  last,  until  the  tin.-il  ])n'duct  did  iioi  e.vcced  an  aver- 
a.L^e  of,  sav.  half-inch  cubes. 

The  line  of  deiuarkation  defining  tlv  point  where 
<irdinary  breaking  should  ce.i-e  and  milling  begin,  has 
never  vet  been  accurately  <leterniiiied.  and  this  limit 
should  be  ascertained  by  actual  experiment. 

Kecentiv  there  has  been  nitu 'i  discus-ion  rcganimg 
the  question  of  sorting,  and  in  scjiiic  ])articular  c;"  fs 
where  sorting  bad  been  practiced  bitlurto  it  has  bee-i 
decided  to  abandon  the  operation,  as  it  is  claimed  that 
more  favorable  results  can  be  obtained  without  it.  '1  here 
.are  maiiv  aspects  of  this  (luestion  which  lend  themselves 
to  conthcting  conclusions,  but  that  there  are  some  cases 
ill  which  the  operation  is  highly  beneficial,  there  can  be 
no  doubt.  To  sav  that  sorting  is  an  operation  that 
should  apply  to  evcrv  proposal  >s.  in  substance,  to  claim 
that  tile  -^ame  conditions  are  presented  in  each  case. 
This  we  know  is  not  so,  and.  consequently,  the  opera- 
tion will  more  particularly  apply  to  one  case  than  to  an- 


'^ 


7(t  TlfE  ECOXO MIL'S  OF  MIMXC 

otluT,  anil  thcrt.'  will  be  limits  at  .vhicli  it  uill  reach  its 
liig'  ;st  efficiency  and  its  lowest. 

1  propose  to  take  a  case  representative  ut  certainly  the 
majority  of  the  mines  on  the  Witwatersrand,  and  will  deal 
with  it  both  on  a  sorting  and  a  non-sortinj,'  basis. 

Assiune  that  we  have  a  mill  of  loo  stamps,  a  ])roperty 
of  I  or  claims  and  40,000  tons  per  claim.  The  total  ton- 
nage would  be  4,000,000  tons.  Suppose  each  ton  of  ore 
delivered  at  surface  to  have  the  following  value:  50  per 
cent  fine,  12  dwt,  per  ton;  50  per  cent  coarse  rock,  12 
dwt, ;  100  tons  contain  1,200  dwt,,  worth,  at  $1,008  per 
dwt,,  $1,209,60,  equal  to  $12,096  per  ton.  Without  sort- 
ing we  get,  say,  80  per  cent  extraction,  equal  to  $967.68, 
from  100  tons:  that  is,  $<;.676  ih.m-  ton.  Assume  costs  at 
$5,76  pei   ton,  divided  as   follows:' 

Mining    $^  .=;.i  ptT  ton  milk-il  (' 15.000  ton--"t   $,^".800 

Cru>liin(,'   o.!J  ■■  "  "  \.H(X) 

.Milling    o.()0  ••  ■■  "  O.ww 

CyanuliiiK'      o.fXD  "  "  "^  O.txx) 

.Slime   luiiulling o.u  "  "  "  i,8co 

(H-iUTal    0.72  "  "  ]'  10.800 

Head   I  .'  ■(.• o..?6  "  "  "  5.400 

Minc-dcvclopmoiit   re- 
demption      o  ;j  "  "  "  10,800 

$5 .  70  $80,400 

Leaving  a  profit  of  S3.(;i6, 

One  hundred  heav\  stamps  crush  500  tons  per  day,  or 
15,000  tons  per  month,  e(iual  to  180,000  tons  per  annum. 
Life  of  mine  equal  to  22.2  years.  The  net  profit  made  in 
tliat  period  is  4.000,000  tons  ?.r  $3,916  per  ton,  etiuat  to 
$15.^)64.000.  The  present  value  of  that  amount  at  5  jjcr 
cent  compound  interest  is  $5,470,663.73.  (In  this  calcu- 
lation I  have  not  allowed  for  amortization  of  capital.) 

With  20  per  cent  sorting  we  have  the  following  state- 
ment :  50  tons  fine  at  u  o  ..I.,  e(|ual  to  f)00  dwt.  l"rom  the 
remaining  50  tons,   containing  <kxj   dwt..   we   discard   20 

'  In  tlu■^c  calcul.iti.iii-  tin-  £1  -terlinR  i';  taken  at  $4.80;  i  slnlling 
at  -'4  cent>. 


ORE-BREAKISG  G.\  Tllfi  R,L\D  71 

tons  carryint;  2  dwt.,  equal  to  40  dut..  leaving  560  iKvt. 
contained  in  30  rcmaininj;  tons.  We  thus  have  80  tons  of 
ore  cont-ining  600  plus  560,  equal  to  i,i6o  dwt.,  eiiual  to, 
at  $1,008  per  dwt.,  $i,i6<j.28.  eciual  to  $14,616  per  ton; 
80  per  cent  extraction  eejual  to  $ii.(jy4  per  tun. 
The  costs  in  this  case  would  he  as  follows: 

MiniriK    $.!.'.t  I'^t  ton  niilloil  (' 15.000  toii-'l   $47.J5n 

CrushiiiK   0.12  "  "  "  l.l^oo 

Siirtinn    o.  12  "  "  "  i.«(W 

MilliiiK    o,f)0  "  "  "  9.000 

Cy.inidint,'    o.(w  "  "  "  9.000 

Simu'    iKindliiig 0.1  J  "  "  "  1,800 

r.ciKTal    0.84  "  "  "  12600 

Hoad   "ffico 0.48  "  "  "  7.200 

MiiU'-(kvol"|inK'in   re- 
demption      o  go  "  "  "  l,V?oo 

$().93  $I0.V950 

It  nii;,;ht  he  argued  that  mining  costs  should  lie  taken 
lower  in  this  case  as  against  the  first,  seeing  tliat  the  fair 
proportion  of  general  charges  is  spread  over  the  larger 
tonnage  mined.  The  statement  would  leave  a  profit  of 
$4,764  per  ton  milled;  18.750  tons  ])er  month,  equal  to 
225.000  tons  per  annum:  life  of  mine  e(|ual  to  17.7  years; 
ti'ii'-  iniiled  ecjual  to  ,3,200,000.  at  $4,764  per  ton;  net 
protit  equ.-d  to  $15,244,800  earned  in  17.7  years.  The 
present  value  of  that  amount  is  $6,429,644.  or  a  difference 
in  favor  of  sorting  of  $058,980.  In  this  comparison  we 
have  the  same  sized  plant  milling  the  prochut  of  18,750 
tons  mined  in  the  one  case  as  against  15,000  tons  in  the 
other. 

.\gainst  the  extra  cost  of  mining  to  pn.duce  15,000 
tons  for  the  mill  when  sorting,  we  have  the  extra  cost  of 
milling,  handling  and  treating  the  extra  sand  and  slime 
which  we  should  have  to  incur  without  sorting.  It  must 
not  he  forgotten,  too.  that  in  the  case  of  non-sorting,  every 
ton  of  waste  rock  has  to  he  jinnided  with  10  tons  of 
water,  and  the  cost  of  up-keep  and  cleaning  out  of  slime 
pits  will  he  increased  In-  reason  of  the  extra  tonnage.     I 


72 


////;   LlUXUMICS  <)!■   MIMSC. 


have  assumed  the  cost  of  milliiii;  t^  lie  \.Vx  same  in  hotli 
cases.  The  diiIv  extra  capital  (.xiJeiuHlure  lor  the  case  in 
uhich  we  adopt  ^ortini:;,  is  the  sortirt;  phmt.  It  has  hinii 
argued  tliat,  if  tiic  mill  capacity  were  increased  to  an  ex- 
tent sufficient  to  cii|)e  with  the  extra  tonnage,  this  woiihl 
he  more  economical  than  sorting. 

Takins^r  the  casi  -  above  cited,  we  must  increase  to  3,750 
tons  more:  as  one  st.ani])  will  crush  150  tons  per  month, 
this  is  e(|nal  lo  _'5  stamps  more.  \\  iih  the  increased  ton- 
nage workiuL;  costs  nnyht  he  reduced  to,  >a\".  $3.28;  hut 
a  correspondint;  increase  in  the  mill  when  sortinj;  would 
also  show  reduced  workintj  costs,  and  therefore  the  com- 
parison would  onI\  increase  the  favorahle  aspect  for 
sortini^. 

'The  rock  discarded  I  li.ive  estimated  at  2  dwt.  in  vahu', 
Sj.oim  per  'on.  We  <^.'\  So  per  cent  extraction  from  this, 
equal  to  $1,613.  It  has  to  he  crushed,  i.'c.;  milled,  Txic. ; 
cyanided,  ()OC.  :  converted  into  slime  and  handled  lJi\  ; 
t'ital  $1.44;  and  the  mari^in  in  proln  would  not  cover  it.> 
•-hare  in  dejireciation  of  plant  and  tlie  loss  of  water  in- 
S'lhed,  while  at  the  sani(  time  it  is  j  reventini^  the  treat- 
intiit  of  more  v.ihiahle  ore  if  --orted  ;  r.ncl  all  this,  too,  or. 
the  assumpt'on  th.at  its  corresponclini,'  residue  would  only 
lie  0.4  dwt.,  and  nothing;'  in  the  slime,  wliereas.  it  is  jiroh- 
ahle  that  the  sand  residut^  and  die  slime  from  it  would  he 
the  same  as  the  rest  <  f  tiie  ori'.  and.  therefore,  more  th;in 
0.4  pciiiivwei!j;'ht. 

I  .-nil  ]iresup]iosin^-  in  thest.'  illustration:^  that  jo  '.vr  cent 
^'TtiiiL;  is  not  onlv  pos-ihle.  hut  easy  of  actual  Inlliliinriit. 
There  are,  however,  main  variations  in  the  case--  to  which 
sorting  is  applii'd,  and  e;n-h  ca-.e  nnist  he  judfj^e'i  on  it>  in- 
duidual  merits.  These  \ari;uioiis  mpv  he  expressed  as 
lyins.;  mainly  in  tlu   faciov  oi  reef  thickness. 

I'or  instance,  on  a  reef  3  in.  thick,  where  the  slopes 
a\erai,'e,  sa\.  4_'  in.,  the  reef  i'\atter  in  every  ton  of  ore 
niiiud  i^  onlv  7  jiir  ciiit,  and,  ;i--^uminL:  th;it   we  have  50 


i\i- 


ORi:-nKi:.iKixc  ox  rm-.  r.ixd 


T.i 


tons  of  fine,  containing;  3.',  terns  of  ruci,  we  have  50  tons 
of  coarse  rock  containing:,  the  same  proportion.  In  such 
instances  it  niiijht  he  jx^ssihlc  to  sort  40  tons  of  waste  rock 
in  everv  icx)  tons  from  the  mine. 

(  )n  the  other  hand,  we  may  have  12  ft.  of  reef  matter, 
of  which  we  mine.  say.  the  central  8  ft.,  and  as  the  whole 
of  our  prodiict  would  he  reef,  no  sortinj.;  would  he  pos- 
sihie. 

Tliese  are  two  extreme  cases,  and  hetwecn  their  limits 
will  t)ccur  the  variations  hetween  notliini;  and  30  per  cent 
sorting'. 

I  have  thus  far  assumed  50  i)er  cent  as  representing^ 
the  averag'e  percentage  of  fini-  m  ore  from  the  mine,  hut 
naturally  there  are  im])ortant  variations  in  this  factor 
depe.ident  directly  on  : 

( 1 )  Setting  of  grizzly  hars. 

(2)  Method  ot  stoping. 

(3)  Xature  of  ground. 

II  machines  are  used  exclusively  fur  stoping.  the  per- 
centage of  the  hue  will  he  high,  while  if  hand  Ijihor  nnly 
is  used  the  percentage  will  he  low.  On  many  mines  a 
comhination  of  the  tw  is  resorted  to;  30  per  cent,  how- 
ever, represents  about  the  minimum  and  60  per  cent  the 
maximum,  and  something  i^etv  ecu  the  two,  say  40  to  50 
per  cent,  will  be  the  average. 

With  50  per  cent  fine  it  is  neci"^-;ar\  to  cnrry  out  an 
actual  50  per  'x-nt  table-sorting  to  represent  J3  per  cent 
on  the  tonnage  mined. 

On  the  above  showing  it  is  clcai'  that,  where  it  is 
possible  to  sort  out  w.'iste  lock  of  an  average  \ahie  of 
_'  dwt..  it  is  a  highK  protit;d)le  proceecling.  It  is 
possible,  however,  to  sort  too  little  or  too  much.  On  a 
Vin.  ri'ef,  with  ;i  4-ft.  stope  ;uid  40  per  cent  tine,  20 
per  cent  sorting  would  be  tar  too  low,  while  on  3-ft. 
reef-;  and  4-ft.   slopes,  .'dlowiuL;    30  per  cent   tine.   ,20  per 


I 


>i  ii 


r4 


TUB   rCOXO  MIL'S  01'  MIX  IXC 


cent  would  be  far  too  high,  and  tlie  average  vaUio  of  u>e 
(Hscardcd  rod    would  rctlect  this. 

Kach  case  must,  as  before  stati d,  be  figircd  out  on 
the  particular  circumstances  regarding  rcc!  and  slope 
thicknesses  which  obtain. 

In  some  cases  on  the  W  itwatcr-rand  i  ..  ivc  heard  it 
argued  that  the  ([uartzitc.-.  immediately  overlying  or 
deriving  the  reef  carry  >ut^icient  gold  to  make  their 
treatment  profitable,  but  1  have  not  met  any  such  cases 
])ersonally,  excepting  iri  some  isolated  sectioi  ■.  where 
the  occurrence  is  too  linuted  to  inllm-nt  the  gencr.il 
f[uestion. 

Naturally  tiie  object  of  sortini  is  to  discard  rock 
which  cannot  be  treated  profitably,  and  if  the  vahu  of 
the  waste  rock  at  any  time  exceeds  this  1  iting  factor, 
then  the  operation  is  done  at  a  loss.  That  limit  will  vary 
according  to  conditions,  and  must  be  computed  iiide- 
])endent!y  for  each  proposition. 

It  is  not  an  easv  matter  to  arrive  at  the  value  of  waste 
rock.  I  know  of  no  method  of  sampling  in  vogue  to- 
day which  could  br  called  accurate.  Tiie  best  check  on 
the  work  is  the  recovery  set  against  the  value  in  the 
mine,  and  uie  discretion  of  tin-  managrr  must  be  relied 
upon  to  see  that  there  is  a  prop'  r  corrcs,)ondence  be- 
tweti  these  two  points. 

There  are  metluxls  which  suggest  themselves  cer- 
lainlv,  and  of  these,  either  ■  if  the  two  following  n.i^lit 
be  ado])ted : 

(  1 )  .\  certain  |)erceiitage,  or  even  'he  whole  of  the 
waste  rock  coming  from  the  sorting  i)lant.  to  be 
])asse(l  ihrougli  a  set  of  two  or  more  bieakers  and  re- 
duced fine  enough  to  he  sampled.  Sami)les  to  be  taken 
constantly  over  a  juriod  of  one  nunith  and  the  opera- 
tion to  be  repeated  every  few  months. 

(_')  Five  or  lo  stamjis  to  be  occasionally  set  aside 
entirelv   fr)r  waste  rock,  and   tin    crushed   prodict   to  be 


I 


ORL-BRIi.lKl.W;  OX   Till-.  R.\SD  75 

treated  iiulepciKlcntlv  uf  tlio  ore  ])assiiij^  t'r.roui;!!  the  re- 
iiiaiiid'  -  of  the  mill. 

I  )f  these  two  alternatives  the  tirst  is  the  nuire  feasi- 
ble, although  the  secoiul  i.^  undoubtedly  the  more  accu- 
rate, but  the  expense  attacliing  t(j  the  latter  method 
proliibits  it.  if  a  mine  is  nut  in  a  position  to  keep  its  full 
mill  going,  it  might  use  some  of  the  idle  stamps  for  this 
purpose,  an<i  instead  of  treating  the  resultant  pulp  sep- 
arately, siniidy  take  a  careful  series  of  screen  samples. 

Another  point  (  which  has  arisen  and  wiiich  bears  very 
directly  'in  our  present  condition  wherein,  owing  to 
shortage  of  labor,  we  are,  in  some  cases,  able  to  mine 
only  sufficient  ore  to  feed  a  p<»rtion  of  our  battery)  is 
whether  it  is  not  of  greater  advantage  to  run  tiic  whole 
mill  on  un.sorted  ore  than  to  .-^dopt  sorting  and  keep 
stamps  Iving  iille. 

Take  the  case  of  i  mine  equipped  with  loo  stamps, 
where  only  500  tons  of  ore  can  be  milled  per  day.  If 
J5  ])ir  eeiit  sorting  is  adopted  only  75  stamps  can  be 
run,  whereas  without  sorting  the  full  mill  could  be  kept 
running. 

.Assume  the  ore  consists  of  30  per  cent  coarse  rock 
and  50  per  cent  fine,  and  is  worth,  delivered  at  surface, 
14  dwt  ,  and  that  ,>e  secure  80  per  cent  recovery  in 
either  case,  and  tluit  the  waste  rock  discarded  in  the 
case  of  sorting  is  2  dwt.,  we  then  have  the  following 
comparative  statement: 

Case  for  Sortiiiii — 

lew  st.iiiips  will  crii-li  500  tiiiis  iif  iiri'  per  <l;i^. 

-'50  tons  fine  at    14  du  t ,3. 500  dwt. 

IJ5  ton,  vdrtt'il  cue  .11   _>()  d"    .^.^SO  dwt. 

Tiital  y-^  t.ins  of  ore  ,it   iS  (!wt ''-750  dwt. 

Eighty  per  cent  of  18  dwt.  amounts  to  14.4  dwt.  at 
$i.ai8.  e(iu'l  to  $14,515  recovery. 

fi.vf'nuliture — 

NTiniiiK   $v,?6  per  toil  milled  ( 375  toii^ )   $I,2^o 

CriisliiiiK   0.1  J         "  "  "  45 


Hlfi 


76  TllL  RCOSOMICS  01'  MIX'XG 

Sorting;    o.  U  jur  tnii  imllod   (,!75tons)     $45 

Milliti^i    o.(«)  "  "  2-3 

Cyaniilnit;    o.(k)  "  "  "  2-'5 

Slinu'  iKiiuiliiij; o.  u  "  "  "  45 

General    0.84  "  "  "  315 

Iliad    ol'tice 048  ••  "  "  l8c 

Miiio  -  (Icveiopnieiu       re- 

ik'iiiption   o.iX)  '■  "  "  360 

I'rofit  S7.315   per  toil,  fqiial   to  $-'.743,125. 

Ciisc  for  A  oii-Sortim:, — 

I'ivu  huiidrcil  tons  .it  14  ilwt.  njiuil  to  7.000  dwt..  So 
per  cent  ot  14  ilwt.  cfjual  to  ii.j  ih\t.  at  $1,008.  i'(|ual  to 
$1  i.jSij  per  ton. 

Ilxpcnditurc — 

Miiuiin   $j.5J  piT  ten  luilk'il  (500  tiin>  )   $l.-'()0 

Cni-limK   (I   ij  "  "  "  '") 

Milliiitr    o.<iij  "  "  "  .Vio 

Cyanidiiii:    0.(10  "  "  "  .VX) 

Siimc  liaiidling o  ij  "  "  "  60 

General o  7 j  "  "  "  j6o 

Head   (iffire o.^O  "  "  "  '80 

Mine  -  doveliipnicnt       rc- 

ileniption    072  "  "  "  .?6o 

$5 . 7()  $2,880 

Profit  $5,520  per  ton;  5(K>  ton.><  at  $5.52')  equal  to 
$2.7^)450.   DitTcrciice  in  favor  of  non-sorting.  $21,375. 

in  tlic  latter  case,  however,  there  is  an  extra  chartje 
for  K)ss  n\  uaier  and  fur  de])reciation  of  the  extra 
stamps  t(j  he  run.  and  if  these  ;illo\vances  he  made  there 
is  in  the  com]iarisiin  ai)ove  made  riT.iark.ahiy  little  dif- 
fermee. 

riie  whole  issue  liint;;es  tniallv  on  the  value  of  the 
rcick  discarded,  if  that  value  is  niiK  i  dwt..  then  sort- 
ini;  will  pruve  ad\;mta,i;x  ais,  hut  if  we  a'low  3  dwt.  for 
the  waste  nuk.  ilicn  it  would  ])a\  to  rini  tin-  idle  -i.'uiip--. 
and  it  is  nn  the  deteiniination  of  this  factor  th.it  the 
])iilic\   adopted  must  he  guided. 

This  cupip.arison  must  in  no  way  he  confused.  Iiow- 
ever.  with  the  c|iK'stion  raised  in  the  first  illustration  in 
wl:  ■  ;i  the  tonnages     i-ushe<l  .are  ofiual. 


MINING    INVESTMENT 

(KiJiiuria!,   Scptcm!>rr    .'•6,    1903.) 

(Jur  frieiiil  Mr.  J.  H.  Cii-K'  has  born  writing-  a  series 

of  useful  article.-,  in  the  Lmidnn  luinuiiiiist :  hi.s  utterances 
have  been  CDUclied  in  very  plain  lanj-uiaj^e,  and  have 
conveyed  a  large  measure  oi  unadorned  fact  intended 
obviously  to  puncture  some  of  the  filmy  sophistries 
which  obscure  the  business  of  mining.  Finally,  at  some 
one's  suggestion,  he  has  given  the  readers  of  The 
Ju-i>)ioniis!  a  (.lose  of  ;idvice  which  summarizes  a  go(id 
deal  of  what  he  has  i)reviou.-ly  said.  Wiih  the  general 
tenor  of  tluse  abitcr  dicta  we  do  not  (luarrcl:  on  the 
contrary,  we  welcome  the  introduction  of  so  mucli  good 
sense  into  mining  matters,  and  congratulate  the  author 
on  the  excellent  results  likely  to  accrue  from  his  out- 
spoken ratiocinations.  However,  as  wc  ourscKes  live  in 
a  country  where  mining  is  still  VMung  and  Impcfu:.  with 
some  of  the  exaggerations  of  youth  but  with  all  of  its 
vigor,  we  take  exception  to  certain  of  his  conclusions. 
The  latter  nndtiuhtedly  suffer  from  brevity:  uiiqualiiied 
generalizations  are  rarely  impregnable,  and  in  this  case 
they  are  obviously  endangered  by  the  enormous  range 
of  conditions  covered  by  the  mining  regions  (if  the  wor'd. 
Mr.  ('uric  says:  "iJon't  invest  in  coppir,  tin  or  s'lver- 
Icad  mines,  but  -tick  to  gold  inine>."  <  )f  currse,  this 
advice  is  intended  not  for  nn'ning  operat.ir.'-  or  well- 
informe(l  |)eopIe,  but  for  the  .average  inv-.,>tor,  \i.l'.o,  like 
an  innocent  child,  i^  supposed  to  wade  on  the  edge  of 
tile  sea  of  tinancial  s])ecnI,'ition.  "Cold  has  a  fixed 
value."  he  goes  on  to  say,  "where.as  violent  tluctuations 
in  the  prices  of  other  metals  u]>set  all  (  stimate-  of  the 
earning  capacity  of  the  mines  producing  tluin."  W'liv, 
tlicn,  should   one   not   avoid   risk   of  nnv   kin.l   and   buv 


78 


/■///:  liCOXOMICS  01-  Ml.\l.\u 


Consols  or  L'liitid  States  Iximls,  or  cohm  rvative  bank 
stock  or  (k-hcium'fs  of  tlic  most  f^ilt-i-il^i-il  varutv? 
\\  li_\  :  Siiiiplv  In'^aiiM'  [iicipli'  ulio  ^n  into  niiniiiL;  <lo 
so  htcanM  iluy  want  a  bij^t^'cr  rriurn  fwr  tluir  money 
and  i.\iHi.t  to  j;(.t  iIk'  bcnctil  of  a  ,spti.ulaii\i  iiibance- 
nKMit  oi  tluir  principal,  lliiii).;  niiniii},'  to  ihc  >trictly  in- 
vestment baMh  (if  wliich  Mr.  Ciirlc  writes  .-o  much,  and 
it  .•~liri\els  to  feeble  dimensions  indeed.  The  investor 
wlu)  \\ant>  to  elinnnate  all  ri-k  in  mining  is  like  a  man 
wiio  expects  to  M-d  br.thing  without  gettint;  wet.  Such 
ideas  entirely  mi>inter])rei  Miv  s])irit  of  leL;itimate  mining. 
\\  liat  shareholder,  we  wcukl  ask.  wants  to  fore,c;o  en- 
tirely all  the  possibility  of  favorable  de\clopment  or  of 
new  disco\ery?'  it  is  the  chance  of  enhancing-  the 
value  of  liis  holding  which  gives  zest  to  the  business 
of  mining.  Such  pos.dhility  of  further  discovery  entails 
inevitably  the  ciinal  [)ossibilit\  of  disappointment:  the 
■mcertainty  cannot  in'  all  in  one  direction.  In  other 
words,  the  mining  investor  only  asks  that  he  may  get 
"a  run  for  liis  money."  in  (.'ornwall  siiareliolders  are 
known  as  'adventurers,'  tiot  with  the  modc-n  ineaning 
of  irresponsible  schemers,  but  with  the  old  l-dizaljcthas 
idea  of  ni'Mi  who  go  on  a  venture,  take  a  reasonable  risk, 
and  are  hopeful  of  a   favorable  return. 

.Mr.  Lurle  has  ex|)ressed  great  respect  for  the  good 
sense  of  .American  engineers  and  mine  operators;  we 
feel  -afe  in  saying  that  these  men  lieartiK  disagree  with 
any  such  sweejjing  statements  as  the  foregoing  in  re- 
gard to  mines  producing  metals  othe'-  than  gold.  Of 
course,  when  the  product  of  a  mine  is  liable  to  tinctuation 
in  market  value,  the  i>urchaser  of  -t,  or  tiie  stockholder, 
will  expect  a  larger  diviilend  to  compensate  for  the 
adili'd  risk.  Markets  varv:  even  the  purchasing  power 
of  gold  is  not  constant;  but  ti  ■  conclusion  's  not  to  try 
to  get  rid  entirely  of  an  essential  .'actor — risk — but  to 
recjuire  a  proportionate  return  in  the  rate  of  interest. 


MIMfXG  fXrnSTMIiXT 


n 


Tlicre  arc  many  of  diir  reader*^.  \vc  fctl  assured,  wlin,  if 
aski'd  to  clioost'  I)tt\v(.i'ii  a  gold  mine  yitldiiij^j  a  small 
rate  (if  intcrist  with  hut  little  risk  (such  is  tlu'  mint  Mr. 
Curie  recommends)  and  a  silver-lead,  copper  or  tin 
mine  with  a  larger  risk  hut  with  a  hig<,'er  return  for  their 
money,  will  select  the  latter.  The  idea  that  all  pold 
mines  must  have  60  per  cent  of  their  market  valuation 
represented  hy  net  profit  on  ore  in  reserve  and  nuist 
yield  lo  per  cent  on  their  investment  price  is  the 
dream  of  a  doctritiaire.  .\  few  such  mines  are  c|uoted 
on  the  exchanf!^cs,  and  tluy  exist  just  now  mainly  hy 
reason  of  a  Inisted  hull  market  and  an  unusual  condition 
of  financial  depressioi  .  When  better  times  return,  even 
these  shares  will  rise  to  a  fic;ure  at  which  they  will  cease 
to  fulfill  the  requirements  which  Mr.  Curie  exacts;  and 
then  the  economist  of  The  Economist  will  have  a  theory 
with  visible  means  of  support. 


A  CARD  SYSTEM   FOR   MINE  ACCOUNTS* 


i;v  I'',  w.  Ui.M 


I  IN. 


Since  tlic  tir^t  nt  t!ic  pri-^iiil  \i'ar  a  vanl  .s_\>tiiii  has 
bicn  111  LiM'  at  till  r.altk-  iiijiiKr  iiiiiif  iit  cmiukcimii  wiili 
tlic  i-iKTal  .--upiiU  acciiuiit,  I  lie  >\>tnii  li.i-  iirovcil 
^ali.->iactor\ .  [\\o  s^l>  ui  (."aid.s  arc  i-iii|)lo\  iil,  (  (in.-  ^i  t 
is  rilaiiKil  in  tlic  >ii]ii>iy  ciL'ik'>  nttii-'i'  and  i>  l^tpt  ii|i  tn 
(latf  i)\  iiiiii.  anil  llif  diIkt  m.  t  i>  kv\n  in  ilic  main  ut'ticc 
anil  i>  uritun  np  1)>  tlic  iiiVici'  ckrk>.  1  lu-  caril>  an-  3 
1)\-  5  in.  a,ui  5  1))  8  in.  r(.>pi.cti\cl_\ ,  ainl  arc  rnlci!  as 
>lici\\n.  Ihc  ililiiTcncc  Ijilui-vii  llic  iwo  >•  t.-'  i>  as  I'ul- 
l<jus:  (Jn  tin  snpiily  clerk's  card,  I'ij;.  1.  cinly  the  date, 
balance  tm  hand,  (iuaiuii\  received,  and  i|uaniity  used 
are  recorded,  while  mi  the  clVice  caul,  li^.  _'.  all  nl  tlu.se 
ajipear,  and  in  ailditiun  the  initial.s  ^>i  the  tirni  >npplyiii^ 
the  j;oods,  cost,  value  nf  ainounl.s  consnnied  and  the  ac- 
cunnt.s  to  which  the  supplies  are  charj^cd. 

i  he  incthud  nf  Using  the  card.v  is  as  follows:  When 
tile  tluplicate  bills  for  sn])i)lies  are  received  one  copy  is 
sen'  to  the  sup]il\  clerk,  who  clucks  the  hill  ;inil  enters 
the  quantities  on  his  cards.  .\s  supplies  .'ire  issued  <lur- 
iiig  the  month  a  iiunuirandum  is  made  in  ;ui  iirdinary 
book  in  the  usu.-il  manner.  .\i  ilic  i-nd  nf  the  inonili 
the  sn]ip!\  clerk  pre])ares  fioin  his  m'-inorandnni  book 
two  reports,  one  of  which  is  arranj;ed  iiccordinj;  to  the 
e\]jen-e  accounts  and  the  other  .'iccordinj^  to  the  kind 
of  supplies.  That  is,  on  <iiie  rtport  under  each  e.\]Hnse 
account  will  be  put  all  nf  the  sU]iplies  charj;ed  ai,'ainst 
that   accoiMit   for  the   month,  ;ind   on   the  other  report. 


i'aper  read  liel.ire  the  Lake  .Supermr  .Mining;  lii~titule,  Aii^;u^t, 


I'JO.V 


(  .lUI)  S)Si;..\l   luR  MJ.\L  .ILLUUM^      81 


iiinkr  i!ic  ihiiuc  ami  .sizi'  of  lach  article,  will  l)c  j;ivt  n  tiu- 
i(K.il  n)ii>iiiiii)tii)i\  ui  that  article.  I'iiis  last  niciuiuiKil 
^lH^■ial  rrji'Tt  assists  the  ofticc  force  in  writing  up  tlic 
otticc  card-.,  riicsc  nport^  arc  tiinud  nvtr  lo  the  i^cii- 
cral  (itVuc. 

At  the  end  of  eacii  innnlh,  when  all  uf  iIk  Mipi>l>  I'lHs 
h;i\e  luin  receiveil  anil  chvckvd.  the  ot'tice  clerks  enter 
the  (|iiamities  and  c  '.-.t>  on  llic  proper  canl.s  and  conipnte 
a  new  ivtra^e  piiie  li  necessary.  'Ihis  average  price 
may  be  computed  a>  clo>el\   a>  iK.sired. 

.\s  soon  as  thi-  pay-n.>ll  i>  lim^hed  at  the  first  of  the 
tollouini;  nuinth,  heforc  which  time  ihe  ^njijily  ehrk  will 
ha\e  MMit  ill  hi^  two  nji'irt--.  the  uttiee  I'nrce  takes  ihe  re- 
]iort  of  the  s'!ppl\  clerk  and  ennipletes  tin-  eiitri  s  on 
the  ot'ticL  car.l-.  d'hc  special  ri  pnrt  of  tie  >iii)|)l  cKrk, 
shiiwiiiL;  the  total  amount  i^sned  ni  each  kind  (if  .Mip- 
|)lirs,  is  nsed  to  clieck  the  work  I'f  pickinj^  out  the  in- 
dividual records  from  the  detailed  report  arraiif^ed  1)\ 
accounts,  and  iiiMires  all  entries  heiiif.^  maile  (ui  tach 
card  at  the  same  time.  When  the  entries  are  tini^heil 
on  a  card,  .'Ui<l  before  retiirninj.;  the  card  to  the  drawer 
the  resiH'Ctive  (|uantities  useil  diiriiif^  the  month  are 
multiplied  by  the  averajje  price  and  the  amounts  entered 
in  the  jiroper  column  on  the  card,  ami  also  in  the  proper 
place  in  the  snpply  clerk's  report.  The  balances  of 
(|uamity  .and  value  are  then  brouL;ht  down  on  the  card, 
and  the  work  on  that  card  is  finished.  I'.y  coiiyiii'.^  the 
'otal  \alne  of  supplies  coii>unie(l  from  the  cards  to  the 
^np])ly  clerk's  special  report  ami  afterward  checking;  the 
footins;  of  this  report  with  tliat  of  the  detailed  report,  a 
^M)od  check  on  all  the  ckricil  work  but  the  nuiltiplication 
IS  (ibtaiiied,  ami  the  aver.ine  price  checks  that  near 
enouj;h. 

The  v;dnes  having-  been  obtained  in  this  \\a\'  for  the 
>iipply  cKrk';-  ri'purt.  the  main  functioii  (if  the  car(l 
ceases  as   far  as  the  mine  bonks  are  concerned,  and  the 


iJ; 


MICROCOPY    RESOLUTION    TEST    CHART 

ANSI  ond  ISO  TEST  CHART  No    7' 


1.0 


I.I 


m  Ilia 
if  1^ 


III  2.5 

||2.2 

2.0 
1.8 


1.4 


1.6 


^  .APPLIED  IIW1GE     Inc 

=1  ■  -  ?    Las!    Mij.'-.    Sf'se! 

r^=  -hester.   Ne*   YorK        1 4609       uSA 

~~  ■fi't  Afl?  -  nwin  -  Chnnp 


82 


Tllli  liCOXOMICS  OF  MIMXC 


sui.ply  clcrk'>  report  is  then  used  in  the  usual  manner. 
If  anv  allowance  is  to  be  made  for  freight  and  other 
exi)en.se  connected  with  sujjplies  not  covered  liy  the 
original  supply  bills,  such  allowance  can  be  made  oy 
adding  a  certain  ])ercenlage  to  the  footing  on  the  su]!- 
ply  clerk's  report. 

.\t  the  ISaltic  the  sujiply  account  on  the  ledger  will  in 
future  be  charged  with  the  anmunts  of  the  supply  bills 
only,  and  credited  with  the  amounts  as  figured  from  the 
cards. 

The  cost  of  handling  sup])lies  to  and  from  ware- 
houses, the  cost  of  heating  ;nid  lighting  these  buildings, 
and  any  other  expense  connected  with  the  caring  for 
supi)lies,  are  all  charged  oti'  each  month  as  they  occur  to 
one  of  the  general  expense  accmmts  umler  the  name  of 
caring  for  .supplies.  The  freight  bills  paid  each  moiuli 
for  supplies  are  charged  ofT  the  same  month  to  the  vari- 
ous ex]jense  accounts  in  i)ro])(irtion  to  the  values  of  the 
supplies  used  by  the.se  accounts.  This  method  of  liand-. 
ling  freight  and  otlur  e\]Hii>e  connected  with  supjilies 
is  as  fair  as  any  other  in  general  use,  and  has  the  fol- 
lowing advantages:  l-'irst.  the  balance  shown  by  the  sup- 
ply account  on  the  ledger  should  check  witli  the  balance 
shown  bv  the  cards;  second,  b\  keeping  the  expense  of 
caring  for  supplies  by  it>elf.  this  expense  stands  forth 
conspicuously  each  month  and  can  be  looked  after  the 
same  as  any  other  operating  expense. 

ihe  time  re(|uired  to  write  up  the  cards  is  not  as 
much  as  one  might  suI■)pl•.^e.     At  the  Ikiltic  4S  air  drills 


are  in  ciperation  and  al)out  750  men  ire  employed,     (In 

Jime    I    there  were   in   use  S~I    cards   i<\   each    kind,  and 

the  vahu'   of  the   su|)plies  on   hand   shown   by   the  cards 

was  abimt   $jS.o<xi.   which   dees  not   include   fuel.     The 

monthly  consuniptinu  ,,f  supplies  cuvered  by  the  cards  is 

about  $8,500.     With   this  amount  of  business  our  ofTice 

1 

C.IRP  SYSTHM  FOR  MIM-  .ICCOU.XTS     m 


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Tllli  HCUXOMItS  or  MIMXU 


f^rcc  C(in>ists  of  a  chief  ^'Icrk.  niir  a>si>laiu,  oiu'  tinu- 
kocjuT  and  niK-  >v.])\'\y  cUrk.  It  tako  llir  ckrk  and  hi- 
a>si~iant  alxml  i  ;l  dav^  m  uriu-  up  tin.  i.-ar(U  aftir  tlic 
snpjilv  L-'urk'>  nixirt.-  arr  nccivcd,  -\~  previously 
stated,  the  data  taken  from  InlN  are  eopieii  on  the  eards 
at  the  eiiil  of  the  month  when  the  office  work  is  li,i,ditest. 
Wl-.at  are  the  advanta,i;e>  of  the  card  >\stein:'  L'nder 
our  old  method  the  >ui'ply  account  \\a.>  chart;ed  with  all 
expen>e  coimecled  will)  the  supplies,  and  then  lo  i)er 
cein  was  added  to  a  jjncc  list  to  m>ure  a  balance  on  the 
sile  .-ide  of  the  account,  dhe  list  of  i)rice>  could  not  he 
ke])t  correct,  hecau.-e  jirices  chan<;e.  and  the  avera,L;e 
])rice  of  the  .--tock  on  hand  \va>  not  known:  therefore, 
the  prices  were  seldom  ri,!;ht.  and  the  lo  per  cent  addi- 
timi  to  this  ap]>ro\unate  ]irice  only  served  to  iiisurc 
char,i;ing  utf  enough. 

When  the  time  came  for  taking  an  inventory  these 
])rices  would  he  put  on  the  list  turned  in  to  the  ottice. 
and  if  the  total  \ahu'  was  -utficiein  to  balance  the  ac- 
count, evervthing  wa>  considered  satisfactory.  (  .eiier- 
.allv  there  was  a  •uri)lus,  bnt  ju>t  where  it  came  in  was 
11, ,t  kno\Mi.  If  there  was  a  diticit,  anotlier  round  of 
warehouses  and  surface  would  be  imnle  and  each  trip 
would  result  in  tinding  something  that  had  been  omitted 
from  the  original  inventory.  d'liese  tinds  might  bal- 
ance tlu'  account.  if  the^  did  not,  then  tlie  .Uhcit 
would  be  charged  off  and  another  \i'ar  started  w-ith- 
out  knowing  just  where  the  deficit  oci  iirred,  Tuder 
the  card  .\stem  the  balanci  that  shoiihl  be  on  hand  is 
shown  on  the  first  of  each  month  and  this  can  readily  be 
clu-cked,  m  most  ca-Ms  bv  in-pectiou,  if  de-ired.  In  any 
I'vent,  the  cards  cluck  the  consnminion,  because,  when 
a  n(|uisiti()n  is  j)Ut  m  for  more  of  a  given  article,  the 
cards  should  show  the  stock  of  that  particular  artich-  to 
be  ii-ed  up  or  nearly  so, 

r.v  cuterinu-  the  exact  bill-cost  liU  the  uftice  cards  and 


i.lIW  SVSTr.M  FOR  U/.V/T  .iccorxTS     srj 


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86 


77//:   r.COXOMICS  OF  MIXIXG 


ccinipuliiij,'  tlio  avrrai;!.'  price  each  inontli  if  iifccssary, 
tiu'  supplies  an-  cliarj^cd  nfif  at  exactly  the  pnjper  price. 

With  certain  sii])i)lies  winch  are  bought  in  bulk  and 
issued  in  small  (|uantities  that  are  not  accuratelv  meas- 
ured, such  as  waste,  oil,  etc.,  the  (piantity  reported  as 
consumed  can  be  increased,  and  the  price  kept  the  same 
and  chances  of  a  deficit  avoided.  l>y  charging  only  the 
bill  cost  to  tile  supply  account,  the  balance  as  shown  bv 
the  cards  slundd  check  witb,  the  balance  shown  by  the 
account.  When  the  inventory  is  taken  it  is  onlv  neces- 
sary to  determine  whether  tlie  balances  called  for  bv  the 
cards  are  on  hand.  If  there  is  any  deficit  or  surplus  it 
is  known  just  where  it  occurs,  and  the  trouble  can  be 
located  at  once  and  a  remedy  applied.  I'.v  this  method 
the  exact  cost  per  ton  for  supplies  is  known  from  month 
to  month,  and  the  average  for  the  year  should  not  be 
atTected  by  any  surplus  or  deficit. 

In  addition  to  these  advantages  there  are  other  im- 
portant ones,  especially  wliere  the  purchasing  is  done  at 
the  mines.  It  can  readily  be  seen  that  from  time  to  time 
as  supplies  are  purchased  it  is  easy  to  run  over  the  cards 
and  make  up  an  order  covering  a  sufficient  quantity  of 
su])plies  to  ofTer  an  inducement  to  dealers  to  figure 
close.  Then,  too,  by  studying  the  consumption  of  sup- 
])lies  as  shown  by  the  cards,  it  is  often  possible  to  sim- 
jilify  the  stock  carried,  getting  rid  of  some  sizes  or 
ado])ting  certain  standards. 

In  conclusion,  I  wish  to  state  that  the  successful  intro- 
■  luction  of  this  system  at  tlie  P.altic  mine  has  been  due 
largely  to  the  capacity  and  energy  of  the  chief  clerk. 
Air.  William  C.  (./ole. 


INVESTMENT   IN   MINES 

(tJitorial,  October  3,   190J  ) 

In  our  last  issue  we  discussed  the  general  advice  on 
mining  investments  which  has  appeared  in  the  London 
LaDwinist  from  the  pen  of  Mr.  J.  H.  Curie,  the  Special 
Mining  Commissioner  of  that  most  excellent  financial 
chronicle.  Mr.  Curie  himself  has  done  excellent  service 
in  clearing  away  cobwebs  from  the  business  of  mining, 
so  that  his  ideas  come  as  from  one  having  authority  and 
not  as  the  scribes  of  the  daily  press.  Nevertheless,  we 
think  some  of  his  sweeping  conclusions  go  beyond  the 
mark;  for  instance,  the  dictum  that  "there  is  only  one 
correct  way  to  value  a  mine — that  is  by  its  ore  reserves. 
Any  other  basis  of  valuation  is  wrong."  As  an  antidote 
%o  the  twaddle  of  descriptive  matter  which  used  to  form 
the  larger  portion  of  mine  reports  not  many  years  ago 
such  a  statement  as  the  foregoing  is  distinctly  bracing, 
but  Mr.  Curie  is  giving  his  patient,  that  is,  his  client,  a 
corrective  which  will  produce  spasms  if  taken  without 
dilution. 

We  are  all  agreed,  all  of  us  who  want  to  see  mining 
conducted  upon  the  principles  of  sound  business,  that 
the  determination  of  ore  reserves  is  fundamental,  and 
that  the  amount,  value  and  profit  to  be  derived  from 
such  reserves  must  be  the  basis  of  any  appraisal  of  a 
mining  property — but  that  is  not  the  whole  story,  by  a 
great  deal.  One  mine  may  have  $500,000  of  ore  in  re- 
serve with  a  net  profit  of  $300,000,  while  another  may 
have  only  $200,000  gross,  with  $100,000  net  profit  as- 
sured, and  yet  the  latter  may  be  worth  more  than  the 
former.  One  mine  may  be  like  a  man  of  advanced  years 
with  a  fine  record  of  achievement  and  great  capacities 
apparently   unimpaired,   but    still    with    the   certainly    of 


////:    .':C  (^\U.l//C.N    Ui    MJ.\I.\(, 


a  pruxiiiiati'  ccssaticjii  in  lii>  aiiivitics.  wliilc  aiioilur 
mine  may  Ijc  cuiui)aral)k'  to  a  youiij^-  man  with  \\"\ 
niucli  tu  spuak  of  in  ihc  i'. :.\  of  work  done,  but  with 
j^nat  powers  and  ihi-  promise  of  a  fmc  career.  W'e  re- 
niendjer  a  mine  whicli  wa>  carefully  surveyed  and 
samjiled.  with  the  rcMilt  that  il  showed  ore  which  wctdd 
vield  $436.iHH)  net  protit,  but  most  of  the  heading's  were 
poor  and  the  ore  bodiics  were  evidently  erratic:  such  a 
property  was  worth  no  more  th;in  the  net  vahie  of  the 
ore.  if  it  were  wnrth  a>  nnicli.  the  interest  on  the  money 
invested  durint;  the  period  re(|uired  to  take  out  the  ore 
reserves  beini;  balanced  auain-t  the  sli.ijht  chances  of  fur- 
ther successful  development.  .Another  mine  with  $80.- 
000  of  profit  assured  was  sold  for  $250,000  cash,  and 
subse(|uentlv  made  three  men  millionaires.  Of  course. 
Mr.  Curie  is  addressing  F.nsHsh  investors  in  mininp: 
stocks  and  not  expectant  purchasers  of  mininpf  property; 
nevertheless,  the  same  consiilerations  hold  <:];ood.  W'e 
mi.i^ln  instance  the  Tondxiy  mine,  situated  in  Colorado 
but  owned  largelv  by  I'.ritish  investors.  That  mine  was 
bought  mainly  on  the  fine  showing  made  by  o/c  le- 
>erve^  which  were  over-rated  and.  as  a  consC(iaence.  it 
proved  a  disappointing  investment:  beyond  the  original 
ore  blocked  out  at  the  time  of  inirchase  very  little  more 
was  ever  opened  up.  Subsecpiently.  thanks  to  an  ener- 
getic manager  and  a  capa!)le  directorate,  the  company 
purchased  an  ailjoining  young  mine,  practically  a  pros- 
pect, which,  though  secured  for  a  fraction  of  the  sum 
paid  for  the  original  'I'oinboy  mine,  has  since  turned  out 
a  much  more  valuable  property.  It  is  a  fact  that  the 
Tomboy  shares  were  worth  more  on  the  purchase  of  a 
jirospect  than  on  the  acquisition  of  a  well-developed 
large  mine. 

(  >re  resiTves  are  not  everything:  expansion  ami  de- 
velopment are  of  the  essence  of  successful  mining.  It 
has  been  pointed  out  in  these  columns  >hat  a  mining 


L\'n-.sTMi:\r  i\  Mixr.s 


89 


prnponv  iiiav  bt.'  ruiiKd  l)>  liaviiif:;  too  imu-li  .)rf-l)car- 
iiiL,'  ,L;roiiii'l  ii|niuil  up.  Itir  the  co.si  ni  kiipiiiL;  the 
kvcls  uptii,  (liaiiiiiij;-  (.■xti.'iisivc  opening's  and  ruiiuwiiip 
tlic  linilnriiiL:  iii,i\  irpi\M.'in  a  hij^li  rale  "f  iiitiTi.st  uii 
till'  capital  Imii.l;  (I'uniant  in  tlic  on;  reserves.  Tiiis  re- 
fer"- ]iarticul;irl\  Ui  iron  and  eoal  properties,  but  it  may 
verv  well  ajjph  to  laVL^e  l(i\\-,i;rade  j^old  (le])osit>  such  as 
those  of  the  Kand  i>r  inin,>  belon^'inj.;  ti  the  cla-s  nf 
the  lloniestake  and  Ala.-ka  Treadweil.  In  Mther  worils, 
it  is  not  ])rotitable  to  o])en  u])  ore  risirve>  nnieli  in  ex- 
cess nf  the  tnnna^H'  e(|uivalent  to  the  output  f.ir  a  cer- 
tain time.  That  period  may  be  iletermined  by  the  expense 
of  niaintenance.  as  already  described,  and  the  character 
of  the  ore  deposits;  if  these  are  erratic  or  s])ora(lic.  it  is 
obviously  nece>sary  to  ".i^dve  liosta.t^es  to  fcjrtune'  and 
ensure  regularity  of  production  by  averaging  a  large 
nund)er  of  discoveries  and  stopes  of  varying;  tenor. 

Mininix  would  nut  engage  the  energies  and  interest  of 
so  many  if  it  were  but  a  question  of  running  a  tape  over 
blocks  of  ore  and  testing  their  value  by  sampling:  all 
this  is,  we  repeat,  fundamental,  and  Mr.  Curie  has  done 
well  in  emphasizing  this  basic  fact  ;  but.  beyond  such 
necessarv  procedure,  it  remains  a  fact  that  the  attract- 
iveness of  mining,  that  feature  of  it  which  reipiires  the 
most  judgment,  is  the  weighing  of  probabilities  in  future 
development.  It  is  on  the  chances  of  this  that  men  buy 
and  sell  mines,  taking  bigger  risks  than  Mr.  Curie  is 
willing  to  face,  but  expecting  larger  returns  also.  We 
venture  to  doubt  whether  lo  per  cent  investments  on  a 
basis  of  ore  reserves  will  ever  be  a  leading  feature  of 
gold  mining  activity;  rather,  it  is  the  20  to  25  per  cent  re- 
turn with  the  chances  of  n  speculative  enhancement 
which  engages  the  mine  ojierators  who  are  most  suc- 
cessful. .After  all,  the  best  kind  of  mining  is  that  actu- 
ated hv  the  combined  skill  and  spirit  exhibited  by  the 
Cornish    'tributer'    nr    more    modern    lessee,    or    'leaser," 


i  5i 


|i 


I' 


'.Ill 


/■///•.   IaOXO.MH  S  Ol-   MIMW; 


who  sizi'S  up  a  certain  i)()rti<m  <if  territory  m  a  tnitio  and 
lakes  tlic  risk  of  lU Mlnpint;  it.  iiui  on  ore  to  l)c-  SL'tn 
in  plain  view,  but  on  the  reasonable  expectation  of  rind- 
ing soniethinp^  pood.  It  is  the  experienced  tributer's 
sense  and  not  the  money-lender's  cantion  which  ha> 
Imilt  np  inininp  in  the  past  and  will  make  it  the  great  in- 
dustry in  the  future. 


GOLD  MINE  ACCOUNTS 

y/if  Editor: 

Siu — It  ih,  iHTha])s,  not  astoiiisliin^  tlial  so  little  has 
hcon  written  on  this  discussion  which  Mr.  Hoover  so 
comprehensively  opened  on  July  li,  but,  none  the  less, 
1  nun  to  a  disappKintnienl  which  inii^t  be  .shared  b) 
an  iniporta   t  cuntinjjjeiit  of  the  profession. 

The  snijject  is  sn  lari,'e  that  eiif^ineers  may  well  hesi- 
tate to  attack  it  in  the  limited  area  of  Di.scussion,'  and 
>et  1,  for  one,  believe  that  nuich  can  be  gained  by  an 
imlimbering  of  ideas  upon  the  subject. 

Ildokkceping  pure  and  sinmle  is  a  matter  of  arith- 
metical accuracy  and  has  been  developed  into  a  science. 
Acccjunting  is  a  broader  term  and  depends  for  its  value 
upon  the  proper  segregation  of  items.  The  subdivision 
of  Mine  Accoimting  (1  take  the  liberty  of  dropping  Mr. 
Hoover's  word  '<ii>ld."  which  seems  to  draw  a  distinc- 
tion scarcely  necessary  in  this  country  at  least)  is  one 
of  the  tools  of  the  mining  engineer  and  one  that  nowa- 
days is  of  increased  importance;  and  it  certainlv  seems 
that  the  developments  in  other  lines,  in  Mine  Surveying. 
for  instance,  or  Economic  (ieologv  or  Metallnrgv,  have 
outrun  those  in  this  no  less  impcjrtant  one.  It  would 
seem,  then,  that  a  discussion  of  the  subject  could  not 
but  result  in  a  clearer  appreciation  of  the  needs  of  the 
case  and  at  least  a  nearer  approach  to  uniformity  in 
practice,  though  it  is  scarcely  probable  that  anything 
apiiroaching  the  tmiformity  of  surveying  methods  could 
be  hoped  for. 

Mr.  Jenkins  has  indicated  how  easily  segregation  can 
be  accomplished,  and  1  for  one  can  bear  witnes.s  to  that 
from  personal  practice.  Probably  the  niajoritv  of  engi- 
neers  would  cordially   adhere   to   a   practicable   uniform 


f)L' 


I'lir.   F.COSOMhS  ()!■   MIXING 


system  i'mt  slii,-.  Mill,  it  i.-^  ildiiUii'iil  ii  .ni>  Usn  iii.iii.iuiT-- 
(li-sirc,  (>r  many  niiiR->  (Uiiianil.  liu  >.iiin  ilt;.;rn  ..r  kiinU 
of  segregations  ui  costs,  so  that  any  universal'  sy>lini 
must  be  one  of  great  elasticity.  VVc  can  scarcely  expect 
iliat  mine  managers  will  fa\i'r  am  s\~tuii  that  ilemands 
the  earr\iii};  nf  ai'Ciiuiit>  Wn  wliuli  they  see  iiu  use,  so 
ih;it  our  ])r(ipnsc(l  >.\siiip.  Iml^t  he  e.'ijiahle  nf  simplifica- 
tion tu  a  few  I;a>al  aeenimt-  a.--  well  a>  nf  iiitinile  elalm- 
ratinii.  'I'lure  are  ca>es  where,  tn  iirn])erl\  man:ige  ;uid 
check  up  a  hu>ine--s  and  tn  carry  nn  'lie  ■■iiiterminahle 
c;mipaign  for  ecniiniuv  and  improvement,"  the  manas^'ir 
may  have  to  subdivide  extiMisively.  and  it  is  almost  cnii- 
ceivahle  tliat  there  are  other  cases  where  the  "■morbid" 
iiii>applicatinii  nf  (iiiiend  l.edt^cr  Accnunts,  spnken  nf 
b\  Mr.  C'oni'-tock.  (|uite  tills  the  need;  ami  this  diversity 
nf  need  must  he  duly  considered  in  devising  an/  general 
system. 

IJut  there  is  a  ])articu]ar  class  of  accounts  that  have 
ahvavs  been  a  stumbling  blnck,  in  the  h.-'udling  of  which 
there  are  serinus  and  fundamental  ilivergences.  Mr. 
Ibtnver  has  referred  tn  ihe;-e  in  llle  .^ecnnd  C(jlunm  nf 
h'\>  discussion,  and  mi  anntlur  ])age  of  the  same  number 
of  the  JorKX.M.  are  tw.  i  .-md  mu-half  cnhmins  on  a  simi- 
lar subject.'  1  he  .L;ainiit  nf  common  vari.atinns  is  clearl\ 
and  concisely  run  u])  bs  Mr.  Hoover,  while  Mr.  G.  A. 
Denny,  in  the  'Deep  Level  Mit.es  of  the  Rand,'  ex])and,< 
the  matter  mnst  lumiiiniisK  .  I  am  reierring.  of  course, 
to  that  list  of  accounts  that  includes  Capital,  Deprecia- 
tion, Maintenance.  Reserve  Fund.  .Amortization  of  Capi- 
tal and  Mine  Development  Redemption,  to  use  Mr. 
Deiinv"s  own  headings  in  the  latter  half  of  Chapter  X 
of  his  book. 

I  am  not  so  foolhardv  a^  to  open  a  discussion  on  these 
vexed  (piestions  here,  but  the  arguments  stated  by  Mr. 

'  'r.iynient  of  Rxtcnsinn  of  Mininp;  Plant  Out  of  Revunuc'  By 
J.  11.  Curlt.     Ihis  JoLRNAL,  p.  4.S,  July  li.  1903. 


GOLD  Ml.\ 


ILLUI   ..  /  S" 


9H 


I),  nnv  t>'"  'i"J  <■""  show  most  tlcarlj  irate  views 

iliai  iii.iy  lu^jically  l)t'  held.  In  vifu  ^i  iiu--.  tluii,  '' 
WMiiM  sicni  tliat  tile  iiiD-it  that  coulil  i)f  iloiic  in  regard 
til  iliis  system  of  aci.i>iiiil  >  1)\  any  such  joint  coniinis- 
.-ictn,  as  was  ijrojmscd  l.v  Mr.  llooviT  and  sccondi-d  witli 
fhd)i)ratiuns  hv  .Mr.  ('()ni>t(K-k.  umuI.I  he  tn  urL'i'  the 
general  aduptinn  'if  eertai'i  l)niad  jiriiiiiple'-  invi''-in,L; 
ihe  (Uniand  fur  an  e.xplieil  statement  in  eaeli  insianee 
as  tn  ju.'-t  what  eaeli  accDiint  included.  In  regard  to  the 
<  •piratint,''  .Vccutnit--.  si'Rrcgatiwns  shmild  he  so  niach'  in 
tile  hooks  ui  first  entry,  evtn  tlion^h  imt  carried  intu 
the  ledpjers.  that  ex{)ert  examination  could  re-apportion 
costs  at  am   time. 

I  )n  lines  such  a>  the^e  it  .'^eeins  tn  me  that  a  rcasnn- 
ahle  iiniitirmit\-  enuld  he  expected.  I'.esond  that  it  wunld 
scarceU   he  ])iissihli'  to  '^u. 

R.  (jir.M.w  F'.RowK. 

San   Francisco,  Sept.    i6.   ifjo^. 


li 


4 


I 


I    l\ 


CARD    SYSTEMS    FOR    MINE    ACCOUNTS 

The  Editor: 

Sir — Tlie  use  of  card  svsiciiis  in  niultitmliiious  varia- 
tion in  alni()>t  I'vory  liiu-  of  hnsincss  except  niiniiii,'  has 
now  become  a  recognized  essential  to  proper  accounting. 
W'c  have  hooks  of  great  value  explainuig  in  detail  the  aj)- 
plication  of  such  systems  to  factory  costs  and  to  classi- 
fication and  summarizing  of  expenditures  in  mercantile 
houses;  the  keejiing  of  records  in  accessible  form  for 
practical  business  purposes  is  used  by  banks,  trust  com- 
panies, msuraiice  companies,  libraries,  physicians,  den- 
tists, mercantile  agencies,  real  estate  agents,  telephone  and 
telegra[)h  coni])a;ues,  gas  companies,  attorneys,  collection 
agencies,  manufacturers,  railroads,  churches,  architects, 
Iiotels.  publishers,  societies  and  by  almost  every  conceiv- 
able class  of  industries,  except  those  connected  with  min- 
ing and  metallurgic  practice. 

There  are  some  important  mining  companies,  smelting 
works  and  mining  engineers  that  have  taken  advantage 
of  the  ready  supply  of  filing  cases  and  card  stock  in  the 
market  to  make  more  or  less  desultory  attempts  to  im- 
prove upon  the  common  slipshod  and  ineffectual  modes 
of  accounting  which  jjrevail  in  these  departments.  That 
this  practice  has  n(jt  become  general  is  attested  by  the 
experience  of  the  writer  in  consultation  on  the  subject  of 
mine  accounts,  and  very  recently  by  the  reading  of  a 
paper  by  Mr.  ]•".  W.  Denton,  which  was  published  in  this 
JoiKN.SL.  September  26,  1903,  p.  471.' 

Without  desiring  in  any  maimer  to  detract  from  Mr. 
DeiUon"s  paper,  I  merely  wish  to  refer  to  it  as  proof  that 
tJie  mining  fraternity  is  far  and  awav  behind  the  times 


* '.A  C:\rA  Sy-tcm  fnr  Mine  Supply  Aooiuntv'     l!v  V    \\    Ocn- 
ton.       P;iper    rt-rnl    licforc    -.lie    Lake    Suinrirr    Mitmii;    In-titntr, 

August,    If>5,? 


CARD  SVSTRMS  FOR  MIXE  ACCOUNTS     9.", 


in  failing  x.<  -dopt  modern  approNcd  methods  in  the 
countintj  hou  .e  and  alioui  the  works  gi.nerall> .  For  tliere 
is  nothing  different  in  the  lorins  and  uses  outhned  in 
that  paper  from  what  are  ordinarily  in  op'ration  at  thou- 
sands of  well-ref^ulated  commercial  establishments  not 
en<jaf,'ed  in  mining.  That  the  me' hod  is  new  to  mining 
men  may  be  inferred  from  the  fact  that  tlic  present  writer 
lias  never  run  across  it  in  such  cases,  except  where  he  has 
himself  instituted  it,  alviys  with  gratifying  results. 

There  are  features  of  Mr.  Denton's  paper  which  fur- 
ther illustrate  what  1  have  found  to  be  the  most  stubborn 
prejudice  to  overcome  in  installing  such  systems  at  the 
mines.  This  is  the  inability  to  understand  how  a  method 
which  records  the  minutest  details  can  be  made  really  to 
save  labor  and  time  in  actual  u-e.  ( )ur  author  is  evidently 
not  aware  that  the  plan  adopted  at  the  Baltic  mine  for 
supply  account.-  is  but  the  simple  beginning  of  reform, 
nor  does  he  appear  to  realize  that  his  method  of  writing 
up  the  records  is  but  a  slight  improvement  upon  the 
wasteful  methods  of  the  majority  under  the  ordinary 
system. 

After  a  number  of  years  of  successful  emplovment  of 
the  classified  card  principle,  not  only  with  supply  ac- 
counts, but  with  pay-rolls,  assays,  surveys,  the  details  of 
niine  work,  mill  work  and  all  other  branches  of  the  busi- 
iic^^s,  I  do  not  hesitate  to  say  that  it  provides  fully  for 
every  detail  in  such  manner  as  to  effect  remarkable  econ- 
omy in  time,  cost  and  labor,  at  the  same  time  insuring 
accuracv,  proper  checks  upon  individuals,  and,  above  all, 
the  iilacing  of  the  accounts  in  a  form  to  be  serviceable  as 
truthful  exponents  of  profit  and  loss,  readily  imderstand- 
able  bv  manager  and  directors  without  the  aid  of  expert 
accountants  as  interpreters. 

The  plan  given  bv  Mr.  Denton  does  not  appear  to  ccou- 
nmi/'e  time  materially  over  the  ordinary  method,  although 
lu  deems  it  necessary  to  emphasize  the  point  that  it  is  iio 


i 


!tt; 


run  EcoxoMics  or  mimxc 


less  prompt  in  npiTaliiin.  Ikrc  a,L;ain  1  have  Inuiul  great 
ilittkiili}-  at  the  start  in  cniivineinj;-  oUl  aceoiintaiits  oi  a 
tiiiirinit;iil_v  proved  fact,  that  the  records  can  be  so  en- 
tered as  to  save  time  ahiin(hmtl_\ .  and  so  as  t  i  do  away 
eniirel\  with  the  htter  wo'k  of  'writini;  up."  My  strict 
injiniclion  with  all  card  systems,  in  practice,  is  do  it 
;;('<\'.  This  .^ives  the  da_\'s  own  record  a  completed 
character,  which  has  untold  value  in  wa_\s  <Mily  to  he  ap- 
preciated from  actual  experience.  Mver_\  nit;ht  the  -uper- 
xisintj  officer  on  the  ;L;roiuid  thus  jjossesses  ineans  of 
checking  expendiuu'e  .it  any  point  or  at  all  points.  It  is 
a  wcinderfid  incentive  to  high  ideals,  a  certam  assurance 
of  prompt  detection  of  error  and  inelficienl  service,  and  it 
breeds  habits  of  economy  and  devotion  to  company  in- 
terests. 

In  the  Ikdtic  case  Air.  Denton  uses  the  card  in  connec- 
tion with  memorandinn  books.  1  he_\'  ihiis  beconie  a  mere 
adjmiC!  to  the  old  method. instead  of  a  short-ctit  method 
in  ihemselves.  My  plan  is  very  ditYerent.  In  general  out- 
line, this  is  the  iiiolif.  Mach  and  e\cry  officer  of  record, 
be  be  foreman.  timekeei)er.  supply  clerk  or  other  agent. 
wlietlier  receiver,  distributor,  consumer  or  producer,  is 
su])])lied  with  cards  .adapted  to  his  work,  and  each  records 
his  own  d.-ita  without  knowledge  in  common.  Some  pro- 
vision is  made  to  check  the  report  of  one  by  that  of 
another.  Daily  reporl-  are  tiled  at  the  c  flice.  from  every 
department,  on  fdniLs  csf'Ctiuily  l^rcparcd  to  cpitoiiiicc  or 
classify  the  diiy's  hiisiii.-ss.  In  the  office  a  set  of  forms  is 
provided  to  i;ike  u]>  >tnnmaries  of  each  clay's  report,  on 
sheets  with  cohmms  for  each  suniniary  accmmt.  .ind  hori- 
zontal ntnnhered  lines  from  I  to  31.  The  sim])le  adding 
of  the  columns  gi\es  tot.als  for  v:\ch  accoimt  for  the 
month,  or  for  an\-  minor  period,  if  desired  at  an\-  lime. 
Cohmms  are  provided  for  values  by  day  and  by  month, 
and  c;t'y\tliiiii^  relating  to  the  business  for  the  month 
is  in  the  hands  of  the  accoimtant  on  the  last  dav  <'i  the 


r  ■ 


CARD  SYSTIiMS  I-OR  MlXr.  ACCOUXTS     ttT 

iimiuli.  Till'  niana'jji'r  \m>  a.ailahlc  each  iiiglit  a  correct 
replica  of  the  (la\ 's  business,  and  can  readily  .-.trike  leak^ 
and  lapses  at  once.  Moreover,  the  whole  of  the  month's 
business  is  ref^istered  in  convenient  form  for  immediate 
transmission  to  the  home  office.  This  is  not  a  theoretical 
statement,  l>ut  one  verified  thorou.L;hly  in  my  own  prac- 
tice to  the  full  satisfaction  of  all.  from  directors  and  share- 
holders down  to  the  Inuiiblest  employee  at  the  mines. 

<  )ne  point  must  be  made  perfectly  clear,  and  that  is  all 
that  space  will  now  allow.  The  one  secret  of  success  in 
this  line  is  to  substitute  forms  for  clerks.  The  old  system 
of  accounting  employs  cumbersome  hooks  of  record  ar- 
ranj^ed  only  by  the  dates  or  page  numbers,  re(|uirmp  an 
index  or  a  s\stem  of  back  references,  'i'he  modern  i)lan 
here  advocated  classifies  all  items  immediately,  makinij 
well-devised  forins  and  self-indexinL;  appliances  replace 
clerk  hire,  in  larpe  measure.  I'.y  this  method,  jjroperly 
handled,  I  have  been  able  to  .<;et  lari^e  pay-rolls  readv  with 
all  details  of  work  done,  deductions  for  rent,  hospital, 
store  account,  etc.,  within  r)ne  day  of  the  close  of  the 
month,  besides  havin.c:  at  the  accountant's  elbow  a  suffi- 
cient daily  record  of  every  detail  of  each  man's  employ- 
ment, indebtedness  and  balance  due  him  beyond  chance  of 
dispute.  Tt  is  surnrisint:;  Imw  simple  and  accunite  the 
method  is,  once  the  pro])er  forms  have  Ijcen  worked  out. 
Here  is  where  the  ^'''-''iter  part  of  the  biain  work  must 
be  applied.  Common  sense  and  the  faithful  recordinL,'  of 
details  0)1  the  s^ot,  with  a  filint^  of  forms  each  eveninLT, 
will  accomplish  all  the  rest,  pnnided  that  the  forms  them- 
selves be  prepared  by  a  master  hand.  Perhaps  some  fur- 
ther illustration  may  he  forthcoming:  later,  if  your  readers 
evince  sufficient  interest  to  make  it  profitable. 

TriEO.  B.  COMSTOCK. 

T.os  .\n,c:e!cs,  Cal.,  Oct.  3,  1003. 


; 


APPRAISING   FUTURES 

( KiJiIurial,    Nuvciiibcr    7,    iyuj.> 

( )n  anmlicr  paj^c  wc  jmhlisli  a  letter  from  an  exper- 
ienced .shareholder  concerning  the  appraisal  ol  the  poten- 
tialities of  a  mining  property.  I'.xcept  in  the  rare  case  of 
a  mine  which  has  been  bottomed,  or  one  the  ore  reserves 
of  which  are  restricted  within  an  area  already  fully 
tested,  tiiere  is  a  "sdmething  more"  than  the  ore  reserves 
which  has  to  be  included  in  any  valuation,  llow  much 
value  to  attach  to  the  varying  chances  of  further  success- 
ful deveIo])ment  is  a  problem  which  always  comes  up  as 
soon  as  the  measurable  ore  reserves  have  been  determined. 
From  the  very  nature  oi  the  case,  no  rule  can  be  laid 
down.  How  much  usefulness  and  beneficent  work  would 
you  estimate  to  be  includid  in  the  future  of  a  capable 
man  of  40,  50.  60  or  70  years  of  age?  While  the  amount 
may  be  inferred  from  his  performance  in  the  pa.it,  never- 
theless the  acconi])lishment  already  to  his  credit  may  have 
been  won  at  the  expense  of  his  vital  powers,  and  the 
measure  of  it  might  be  merelv  a  subtraction  from  the  total 
to  l)e  credited  to  his  whole  career.  Obviously  this  reason- 
ing will  depend  upon  whether  the  man  is  40  or  70  years 
old.  .It  any  rate,  the  simile  is  not  without  its  counterpart 
in  the  case  of  appraising  tiie  future  of  a  tleveloped  mine. 

A  well-known  Tasmanian  mine  has  just  been  made  the 
basis  of  a  com])any  formed  in  Lonuon.  The  (iroperty  is 
capitalized  at  £500,000;  the  report  of  reputable  engineers 
states  that  it  "should  he  capable  of  producing  a  profit  of 
from  £((5,cxK)  to  £i(X),(x»  per  .lUnum,  assuming  thai  the 
reef  maintains  its  size  and  value."  Should  certain  exten- 
sions of  levels  and  cross-cuts  meet  with  the  success  an- 
ticipated, the  ore  reserves  will  amount  to  a  tonnage  ecpial 
to   three   years'   production    on   the   scale   outlined.      The 


APPRAISIXC.  rUTURES 


9!) 


mine  is  worked  out  down  t;)  718  ft.,  it  has  an  ore-body 
abdiit  1,500  ft.  ionj,f.  wiiioli  iia--  iieen  cut.  but  not  proved, 
at  1,000  ft.  Of  ore  blocked  nut,  tlicre  is  only  8,500  tons, 
equivalent  to  a  net  profit  of  abmit  iy.ooo,  and  lla  esti- 
mates of  future  production  are  based  on  tlie  e.\,)ectati()ri 
of  uninterrupted  persistence  and  continuity.  Even  these 
estimates  show  a  return  of  only  60  per  cent  on  the  capital. 
so  that  a  shareholder  is  taking  a  fair  risk  for  60  per  cent 
of  bis  money,  and  a  long  shot  for  the  balance.  And  this 
is  without  retjard  to  interest  on  the  investment.  In  this 
particular  instance,  the  probabilities  of  future  successful 
develnjinient  must  be  weii;hed  ai.:^ainst  extremely  heavy 
pumiiinLj  costs,  the  full  extent  of  which  is  a  matter  of 
uncertainty,  thousjh  the  tjovernment  j^eoloijist,  Mr.  \V.  TI. 
Twelvetrees,  who  doubtless  expresses  local  ojiinion,  has 
arrived  at  the  conclusion  that  the  ijunipiui^  i)lant,  to  be 
installed  accordint:;'  to  the  plans  of  the  company,  will 
prove  inadequate.  At  all  events,  here  is  a  factor  of  im- 
portance wliich  nnist  offset  even  the  apparent  persistence 
of  the  ore-shoot  ui)on  which  the  estimates  of  profits  are 
based. 

As  the  flotation  is  an  honest  one  throusjhout,  and  the 
undertaking:  is  in  the  hands  of  thoroutjhly  capable  men, 
it  affords  a  i^-ood  example  of  the  ideas  of  different  people 
upon  this  difficult  question  of  mine  valuation.  We  would 
hazard  the  opinion  that,  as  a  rule,  with  everythincf  lonk- 
infj  favorable,  a  mine  in  the  viirnr  of  its  life  is  worth  about 
half  as  nuich  a,L,^ain  as  the  net  profit  in  si<;ht,  but  this  re- 
fers oiilv  to  n.ines  which  have  apex  rights  and  can  po 
down  indefinitely  on  the  dip  of  the  l<ide  or  have  ample 
territory  for  further  ex]ilor;itii>ns  :  moreover,  it  is  but  a 
rouph  approximation  of  the  chances,  iust  as  one  miijht 
sav  that  a  healthv  man  of  40  can  reasonablv  be  expected 
to  en(,'ai;e  actively  in  his  profession  or  business  for  twenty 
years  lonjrcr.  In  practice,  the  cnerinccr  will  weiqfh  the 
evidence  in  each   case — and  it  will  never  be  the   same 


I 


i  t 


lull 


JUL  LICOSOMICS  (J I-  MIM.W, 


in  aiiv  two  mines — and  he  will  realize  that  a  prcjperty  i> 
ixpeetcd  to  return  not  the  capital  alone,  hut  a  hit^h  rate 
111"  interest  during  the  time  reijuired  to  ^et  the  retum  of 
iliat  capital.  This  refers  to  lar^c  developed  mines  necessi- 
latiiii;  heavv  capitalization;  the  question  of  the  price  of 
unproved  prospects,  or  likely  looking  young  mines,  allows 
a  scope  for  appraisement  beyond  the  restriction  of  any 
:..;eneral  rule.  Then  comes  that  insistent  and  final  factor 
11)  all  these  ratirtcinations.  namely,  the  personal  equation 
Hut  that  is  aniither  storv. 


APPRAISING  THE  VALUE  OF  A  MINE 

The  T.ditor: 

Sir.— Your  editorial  in  tlie  issue  of  October  3,  deal- 
ing with  Mr.  Curie's  system  of  valuing  a  mine,  opens 
the  way  for  a  discussion  on  a  point  which  is  often  raised 
in  London.  Among  mining  engineers  and  others  fa- 
miliar with  mining  operations  there  is  a  desire  that  some 
system  should  he  adopted  for  appraising  the  speculative 
value  of  a  mine,  in  addition  to  the  value  of  the  ore 
blocked  out  or  exposed  When  a  property  is  offered  for 
>ale.  the  vendors  naturally  stipulate  that  something 
ti.orc  than  the  ore  reserves  shall  be  considered  when  the 
price  is  being  arranged.  This  extra  value  of  the  mine 
is  at  present  appraised  in  a  haphazard  way,  and  it  usu- 
ally amounts  to  just  as  much  as  the  vendors  tliink  they 
can  squeeze  out  of  the  purchasers  or  the  public. 

It  is  quite  impossible  to  lay  down  any  hard  and  fast 
mathematical  formula  to  meet  the  requirements  of  the 
case,  because  the  chances  of  the  continuity  of  veins  vary 
with  practically  every  imlividual  mine,  or  at  any  rate 
with  each  particular  geological  district.  Also,  the  spec- 
ulative value  varies  relatively  to  the  value  of  the  ore  re- 
serves, according  to  the  amount  of  development  done. 
In  the  two  extreme  cases  of  a  prospect  and  a  limited 
proved  deposit,  the  relative  values  differ  widely,  for  in 
a  prospect  the  speculative  value  is  everything,  while  in 
a  property,  like  some  of  the  Johannesburg  mines,  the 
speculative  value  is  at  a  minimum.  In  spite  of  these  two 
very  obvious  obstacles,  I  think  some  general  agreement 
might  be  found  among  mining  men  for  dealing  with 
this  factor  in  the  value  of  a  mine.  Some  standard  sys- 
tem for  reporting  might  be  adopted,  so  that  the  opinion 
of  the  engineer  as  to  tlie  money  valuv  of  the  chances 


KIL'  THIi  liC()\'()MICS  (>!■   .\//.\7.V(; 

of  further  oic  l)tinc:  discovered  witli  developiiKUt  mij,dit 
1k'  {.'iveii  without  hein^^  iiiismidcrstoi)(l.  1  am  aware 
that  many  engineers  will  object  to  a  proposition  which 
wotdd  saddle  them  with  sucli  a  prave  responsihiHty,  and 
I  aihnit  that,  in  the  Iiands  of  men  of  no  professional  pride, 
this  mnction  or  duty  would  i'e  wasted  and  perha]>s  nu,>- 
used.  TIk  mininjj  profession  is  so  strong  in  influence 
for  good  nowadays,  however,  that  tlie  responsibility 
might  i)e  safely  undertaken.  I'.oth  Tin-:  Encinijckinc 
AN'ii  W..s\yr,  Journal  and  the  Institution  of  Mining  and 
Metallurgy  have  done  excellent  work  in  checking  the 
abuse  of  "ore  in  sight'  by  inducing  engineers  to  adopt  a 
more  definite  plan  of  rcportmg  on  ore  already  blocked 
out  and  developed,  and  the  further  step  of  giving  an 
opinion  as  to  the  possibilities  of  the  future,  over  and 
above  the  ore  actually  discovered,  would  still  furtuer 
assist  in  suppressing  rotten  tuiance  and  over-capitaliza- 
tion of  companies. 

I  give  this  suggestion  for  what  it  is  worth,  and  hope 
it  will  receive  the  attention  of  luining  men. 

SHAREHOI-nER. 

London.  ( >et  14.  1903. 


II 


MINING   COSTS   AT  CRIPPLE  CREEK 

(November   31,    19"3  ) 

The  Editor: 

S,R_Thc  peolopy  and  vein  structure  of  Cripple  Crcik 
have  been  described  almost  ad  muscam  by  many  writers, 
but   so  far  as  I  have  obscrvc.l,  little  has  been  said  to  the 
engineering  public  about  the  very  vital  problem  of  how 
to  make  money  out  of  these  much-discussed  deposits. 
The  impression  seems  to  prevail  among  mining  men  out- 
side of  tlie  district  that  Cripple  Creek  methods  are  crude 
and  operating  costs  high.     Now,  while  glaring  examples 
may  be  produced,  in  the  district,  of  almost  every  fault 
that  coulvl  be  mentioned  in  the  management  of  mines.  I 
think  that  the  conditions  under  which  the  Cripple  Creek 
mine  superintendent  labors  are  not  thoroughly  under- 
stood, and  that  the  methods  employed,  while  they  may 
be  behind  the  times  in  some  respects,  are  yet  fully  up 
to  the  average  in  others,  and  even  ahead  of  the  average 
in  regard  to  certain  features  of  mining  practice. 

A  man  brought  up  in  the  Lake  Superior  region,  where 
iron  and  copper  ores  are  mine<l  from  undergroun.l  at  a 
cost  of  75c.  to  $1  per  ton,  is  apt  to  smile  at  mining  costs 
of  $10  to  $.5  per  ton.  even  after  making  every  allowance 
for  differences  in  the  prices  of  labor  and  supplies.  1  he 
conditions,  however,  are  so  ra-lically  different  that  any 
comparison  on  the  basis  of  tonnage  is  (luite  worthless. 
Before  the  Lake  Superior  man  can  arrive  at  any  under- 
standing of  mining  costs  in  Cripple  Creek,  he  must 
realize  the  two  following  facts : 

I.  M\  ores  shipped  from  Cripple  Creek  are  concen- 
trates produced  bv  hand  sortiuix.  ^ 
2    The  amount  of  development  work  neces-^ary  to  fii^i 
the  ores  is  ,  robablv  50  or  100  times  greater  than  in  the 
Lake  Superior  mines. 


104 


/■///:  /;C().V(;.i//c-.v  ()U  mixi.w; 


At  tlu'  lar^,'iT  ludpi  rtifs  of  LrippU-  Crick  tlie  co^t  cif 
mining  tlic  tulal  iinidiict  of  ore  and  waste  is  only  froni 
$-'.50  to  ^3.50  |HT  till,  tlii>  cn>t  fuvcring  all  tlie  outlay 
<jf  tile  conipaniis  for  all  pnrp<»es,  including  taxes,  in- 
surance and  general  expenses.  This  co>t  does  not  com- 
pare unfavnralily  with  that  of  mining  in  such  places  a- 
Butte,  tile  C  leur  d'Alene.  ur  e\en  Lake  Su[)erior,  wlun 
it  is  con^idered  that  labor  at  Cripple  Creek  costs  4_'.5c. 
an  Imiu-.  as  against  probably  2J.5C.  in  Michigan.  It 
nm;it  be  ren!end)ered  that  the  above  cost,  of  5^250  U> 
$3.50  for  crude  rock,  includes  the  cnst  of  sorting  the  ore, 
which  is  C(|uivalent  to  that  uf  milling  in  other  camjis, 
and  is  fully  as  exjiensive. 

It  may  be  said,  theru'nre,  that  nn  the  basis  uf  crude 
rock  hoisted  the  Cripple  Creek  mines  have  no  reasun  to 
h'-  ashamed  of  tlieir  costs,  as  compared  with  those  of 
other  places.  This  is  I'mjihatically  the  case,  in  view  of 
the  fact  that  the  specific  gravity  of  the  Cripple  Creek 
rock  is  much  I  -s  than  that  (jf  lead,  cop])er  or  iron  ore; 
that  most  of  the  rock  is  broken  from  shafts,  drifts,  raises. 
or  from  stopes  cut  out  as  narrow  as  po-sible;  that  these 
working  places,  from  their  \ery  nature,  ])rcclude  the  uso 
of  appliances  designed  to  handle  material  on  a  large 
scale,  and  that  the  suriace  ])Iants  are  hampered  by  the 
fact  that,  wlun  the  mines  were  i^tarted,  uo  attention  was 
paid  to  any  future  necessities,  and  consecpientiv  the  e(|uip- 
ment  has  been  built  up  niec<.nieal,  and  is  verv  far  from 
being  economical. 

I  hasten  to  state,  however,  that  a  low  cost  per  ton, 
cither  of  crude  rock  hoisu'd  or  of  sorted  ore  shipped, 
does  not  necessarily  indicate  either  good  mining  or  good 
management,  and  is  nearly  as  apt  to  indicate  the  con- 
trary. Two  mines  may  be  working  in  exactlv  the  same 
kind  of  ore:  and  one  may  ship  ore  at  more  than  twice 
the  cost  for  mining  that  the  other  does,  and  yet  be  doing 
better  work  r.nd  making  larger  profits. 


MINING  COSTS  AT  CRlPI'l.E  CREEK     105 


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lOtl 


TllV.  liCOXOMICS  <>!■   MIMXC 


To  clear  \\p  tlii>  paradox,  it  i-  lU'cos.iry  i<<  call  atten- 
tion hastily  both  to  the  cliaraeicr  of  tlic  ore  hoilics,  ami 
to  the  coiulilU)ii>  of  ^ale  ai"l  treatment. 

t  ripple  treek  has  aK\a>-  been  ilr-criheil  as  a  hi^'h- 
^raile  camp.  'I'hi--  is  partly  true,  ihe  ore  occurs  m  a 
multitude  of  small  veins,  eiilier  siiiKle  or  in  aggregates. 
In  the  small  seams  which  constitute  either  the  vein  it- 
self, or  a  comi)oiunt  pan  of  it.  th.e  ore  is  rich,  but  the 
rock  on  the  walU,  or  between  the  seams,  is  either  wholly 
or  partly  waste,  Tlie  rich  seams  may  vary  in  thickness 
from  a  mere  crack  to  a  foot  or  two,  and  for  these  widths 
may  carrv  from  one  to  several  hundred  ounces  per  ton. 

There  are  no  large  orc-hodies  in  Crijiijle  Creek.  It  is 
doubtful  if  any  si.igle  ore-body,  or  even  any  .single  vein, 
has  priiduced  icxi.oo)  tons  of  shiiii»ing  ore.  The  largest 
and  best  veins  have  been  found  in  the  granite,  where  the 
rock-walls  tliemselves  are  sometimes  uniformly  im])reg- 
n.ited  with  r.ick  vali.e  for  a  width  of  .v  "r  40  ''■  '"  ^"^"'^ 
jilaces  large  amounts  of  cie;!n  ore  ii.ive  been  miiud  and 
shipped  without  sortii-g.  but  only  in  the  swells,  when 
the  veir.  narrows  down,  it  is  always  necessary  to  break 
some  waste,  in  order  to  make  room  to  work. 

The  ore.  therefore,  is  mined  from  vons  of  such  a  char- 
acter that  it  is  impossible  to  get  it  out  without  mixing 
some  worthless  rock  with  it.  Tlie  problem  of  handling 
this  ore  economically  depends  ,.n  the  cost  of  treatment. 
This  cost  is  at  present— an  '  is  likely  to  be  always— so 
high  that  it  becomes  very  essential  to  throw  out  as  much 
waste,  or  low-grade  ore,  as  pos>ible  before  shipping. 
Could  the  ore  be  treated  for  a  dollar  or  two  a  ton.  the 
proposition  would  be  entirely  ditTerent.  The  rich  seams 
in  tlie  veins  are  always  so  friable  that  a  large  part  of  the 
value  goes  into  tire,  and  can  be  saved  bv  catching  the 
latter  on  a  griz.dy.  generally  with  about  ^-in.  space  be- 
tweeen  the  bars.  Sometimes  the  proportion  of  value 
that  can  be  saved  bv  this  method  will  be  as  high  as  90 


MIMXG  COSTS  .IT  CRIPI'I.Il  CRI  F.K      107 

per  cent,  or  fvi'ti   ninn-    of  tlu-  total  guM   in    ilic   vriii 
SoiiH'tiiins  it  iiia\  1)C'  Dill}    -'5  p<T  cent.     It  !ia->  aNo  Ixcn 
provt'il  possible  to  save  coii-iiderahle  on  ,  simply  1)\  wa^h- 
iii^'  the  (hi.^t  otT  llie  wn^-te  rejected  fn,m  the  ore-house, 
ami  colicctiiiR  this  dust  in  the  form  of  slime. 

It  will  be  evident  to  anyone  who  considers  these  facts 
that  tile  proI)leiii  of  niininp  ("ripjile  Cnek  ore  i^  not  so 
much  one  of  breaking  tons,  but  of  savii't^  value.  It 
must  be  obvious,  for  instance,  that  in  a  vein  ulure  the 
value  Ro  into  the  fine,  it  may  be  very  ea>y  to  l)reak  t'To 
much  into  fines.  It  may  l)e  far  preferable  to  take  less  out 
of  a  .slope  at  a  greater  cost.  It  is  eijually  fibvious  that, 
after  the  ore  is  brout,dit  to  the  surface,  it  will  pay  to  reject 
bv  sorting,  even  at  considerable  I'xpetisc.  all  rock  re- 
maininpf  in  the  ore  that  will  not  pav  for  frei!.,du  ami  treat- 
ment. In  other  words,  the  pmbleni  is  n>)t  simpK'.  but 
complex  ;  it  is  a  questi<in  of  maxima  and  n^inima,  in  which 
the  maximum  required  is  the  lart^est  amount  of  net  profit 
from  a  piven  amount  of  pold  in  ihe  deposit,  while  the 
variables  are  the  cost  of  freight  and  treatment,  of  minintj. 
of  sorting,  and  the  value  of  the  rejected  waste. 

Let  us  take  as  a  practic.il  example  a  body  of  lo.ooo  tmis 
of  ore.  running;  i  oz.  gold  per  ton.    This  ore  can  be  mixed 
and    shipped    without    sortinic^   at    a   handsome   profit,   as 
follows  : 
Gross  \aluo  of  ore Sjoc.oO'; 

Cost  of  minintr  in.mxi  torii.  .it  $(  por  ton .10,000 

Frriglit  .iiid  trcitmont.  $S. J5 82.5fX) 

Total  cost   $li2.?0o 

Profit    $.H;,50O 

r.ut  suppose  we  reject  half  of  ibis  ore  by  sorting?  By 
so  doinix  we  throw  away  3.000  tons  that  will  average 
$2.50  per  ton.  or  $12,500.  The  cost  of  sorting,  at  50c.  per 
ton.  will  be  $2,500  more.  Then  our  shipment  will  be  as 
follows : 


III 


iii>  ////:  /:'c(;.\(;.i//c:v  ()!■  mimm; 

5.000  ti>n>.  at  J,^r  50  l)i-T  tMii S187.500 

Cost  of  111  in  lilt;  ami  -drtint;.  $(1,50  iht  ton .S'^-Soo 

I'rciKlit  aiul  trcaiiiit  lit,  :<il  J5 5''.-S<" 

Total  cost  $S«.750 

Fn.tit    $0«.750 

Jn  dihcT  wurd;-,  tlif  i;r()?s  rcccipi>  in  thl^  ciibc  have 
fallen  SiJ,5(J0.  The  ocist  tnr  mining,'  per  tun  i^  mnn.-  than 
twice  as  .qriat;  the  ci)>t  fnr  frei,i;hl  ami  treatment  per  tcin 
IS  .i^j  Ljreater;  the  apparent  siidwint;'  1)\  the  superintendent 
very  had;  hut  nevertlieless  he  has  made  fur  the  eumpany 
•Si  i,J5o  clear  iirufu    m  the  tran>actiuii. 

In  the  first  case  mir  lutal  cu>t  i"r  minin.t^.  frei.t^ht  and 
treatment  is  onlv  Si  1  .J5  per  luii  ;  in  tlie  >ecu!id  ca;-e  it  is 
S17.73  jier  ti>n.  Imt  tlieri  is  mure  muney  in  the  hi  her 
cost.  'I'his  is  an  example  that  has  heeii  wurked  uui  in 
practice. 

It  should  ],':  very  plain,  theti.  that  nuthmi^  cun'd  he 
mure  aliMird  than  tu  juds.;e  the  merits  uf  a  superintendent 
in  Cripple  Creek  merely  hy  the  shipiiins;  cost  ])er  tun  of 
his  ure.  .\ii\  iijiiniun  inn>t  he  funned  un  a  j;uod  many 
otluT  ci  'n>iileratii  ms. 

Mere.  1)>  the  WAV.  1  wish  tu  avuid  RiN'ini;^  the  impre--^ion 
— which  wiitld  he  a  satistactiun  tu  many — that  it  is  nut 
wurtli  while  tu  keej)  a  close  recurd  uf  the  costs  oi  mining. 
On  the  contrary,  this  is  unc  puim  that  is  tiiu  often  over- 
looked. Costs  can  he  kept  in  the  fullest  detail  at  a  merely 
numinal  expeii-e.  .\  sjciud  system  uf  cust-keepiiii;  is  so 
ah>olutely  essential  that  no  property  of  anv  size  can  be 
run  successfully  witliuut  it.  Xu  matter  how  able  a  man 
may  he.  he  can  ltc  t  in  iter  result-^  if  he  knuws  just  what  it 
c(5sts  him  to  do  his  work,  liut  the  costs,  once  obtained, 
must  be  used  with  discretion,  always  bearing  in  nn'nd 
that  the  desired  result  is  the  greatest  net  profil  in  dull.irs 
and  cents,  and  nothing  else. 

To   give  a  better  idea  of  the  coni])lexit\    and   cust   of 


MIMXG  COSTS  .IT  CRIPTLI:  CRJITK      Idi' 

(iIxT.itiii,-  the  larger  mines  mI  the  :anip.  the  fuUow.nt; 
staleiiieiil  uf  operations  at  one  ui  the  largest  prnpcrties 
(luring  one  nmnth  may  he  of  interest  ;  i.S.ijio  tons  of  rock- 
were  mined  from  40  ditYerent  and  separate  ^topes  at  a  cost 
of  ^^Jo;  per  Inn,  nr  S,59.(j<jS.3ij.  The  following  develop- 
ment wnrk  was  done  in  addition  to  the  >top.ng:  2.237  ft. 
of  drifts,  cross-cuts,  winzes,  and  raises  in  4')  different 
headings,  at  an  average  of  $6.91.  $15,455.21  ;  ore-snning 
and  loading  cost,  $S.ij</).ij8.  This  made  a  total  of  So^.- 
523.58.  The  total  amount  nf  mck  hni-ted.  l«uii  from 
slopes  and  dewlopment  work,  was  24.<)3i  tnus.  at  $2.55. 
wliich  was  reduceu  by  sorting  to  7.093  tons  of  shipping 
ore.  at  SS.()(). 

I  think  it  not  unfair  to  say  that  these  costs  are  good, 
considering  the  conditions.  The  rock  is  not  excessively 
har<l.  hut  it  cannot  he  called  soft,  i'art  of  the  rock  is 
ordinary,  unaltered  granite,  and  pa.t  is  eciually  hard 
porphyry.  Wages  will  average  S3.40  for  eight  hours, 
(."nal  C(--^ts  .ihnut  $4.60  per  ton,  and  timl)er  averasjes  $20 
per  i.ooo  ft.  J.  R.  Fi    LAY. 

Colorado  Springs,  Col.,  Nov.  9,  1903. 


1 1 


SOME  ASPECTS  OF   MINING  FINANCE— i 

(Lditurial,    N'-vcinbcr    ^y.    lyujj 

There  i<  a  crond  deal  in  a  uaiiiu.  It  mju  call  a  company 
'A  Syndicate  fur  Moatinj;  Mines'  vr  'An  Assdciatiun  of 
Mining  Underwriters'  you  will  do  for  it  what  was  done 
to  the  proverbial  ddj;  or  the  infant  wIki  siicciinibed  to  a 
shower  of  ill-assorted  names — drowned,  as  it  were,  at  the 
\ery  christening;.  So  relief  is  obtained  by  a  euphemism; 
the  term  'exploration  company'  is  comprehensive  and 
includes  all  surts  of  concerns,  from  those  tliat  start  out 
to  develop  the  waste  places  of  the  earth  to  those  wdiose 
purpose  obviously  is  to  test  the  resiuirces  of  a  credulous 
public.  They  have  lieconie  an  institution  and  plav  an 
important  part  in  the  development  of  the  mining  industrv. 

l-^.xploration  companies  are  intended  in  the  first  place, 
one  may  well  pre.-ume.  to  cxj^lore  potential  mining 
rcgiems;  hut  their  activity  cannot  operate  in  this  direction 
for  long,  because  no  organization  can  continue  to  pav  out 
money  indefinitely :  either  the  casli.  which  is  the  tirst 
requisite,  gives  out  before  any  valuable  tiiscovery  is  made, 
or  such  a  discovery,  perhaps  several  of  them,  is  made, 
and  then  it  becmes  necessary  to  subdivide  the  interests 
into  subsidiary  companies.  Broadly  speaking,  therefore, 
the  exploratiiin  comi)any  liccomes  a  financial  house,  which 
itself,  (ir  with  others,  underwrites  nii.iing  issues  and  di- 
rects their  p(,licy  afterward.  The  Londun  firm  of  Juhn 
Taylor  &  Sons  ha-  been  quoted  in  Xew  York  in  litis  con- 
nection, but  litis  is  an  error,  fcr  ih;it  h^use  is  a  private 
concern  wliieh  undertakes  the  management  of  mines  on 
the  basis  •<(  a  percentage  of  the  profits. 

I-or  in-tanee,  in  the  case  nf  a  well-known  rasinaman 
gold  mine — named  the  Ta-niania — which  has  ju^t  been 
brought  nut   in   I.ondnn   inid^r  the  ;ui'-pices  of   this  firm. 


soMF.  .isrr.CTS  of  mimxg  nx.ixcn   in 


it  appears  iruni  tlic  pr^l^pcctus  that  thu  nominal  capital  is 
placed  at  500,000  shares  of  £1  each,  nf  which  j  10.000  are 
(iffercd  to  the  puhlic  at  par;  the  price  paid  to  the  local 
conijanv  owning-  the  mine  is  £20,000  in  cash,  and  £_mo,ooo 
in   fiillv   ])aid   shares.      Intermediate   agencies  and  uiider- 
vritin^'  commissions  hrin^^  the  ])urchase  consideration  up 
to  £320.000  in  cash  and  shares,  that  is,  £90,000  more  than 
the   amount    actually   passed   over   to   the  owners   of    the 
mine;  the  remaining  £180,000  rejjresents  working  capital, 
subscribed  in  cash  to  an  issue  of  210,000  shares  otYered  on 
the  flotation  of  the   company,   the   difference  of   £30.cxx3 
being  cash  used  in  making  some  of  the  payments  specitied. 
The  contracts  are  in  the  name  of       vendor  syndicate, 
which  pavs  the  expenses  incidental  to  the  examination  of 
the  mine  and  the  formation  of  the  company  ;  this  syndicate 
gets  247,000  shares  and  £19,500  in  cash,  out  of  which  it 
pays   for  the  mine,  giving   one   agent   5,000   shares   and 
another  intermetliary.  mentioneil  by  name,  another  block 
of    5,000    shares.      The    vendor    syndicate    is    practically 
identical  with  a  Colonial  Mines  Syndicate  which  under- 
takes to  subscribe  or  procure  subscriptions  for  the  210,- 
000  shares,  offered  for  subscription  by  the  prospectus,  in 
consideration  of  getting  £53.505.  payable  as  to  £10,500  in 
cash  and  £43.000  in  shares.     There  are  sub-underwriting 
agreements   between   the   Colonial    Mines    Syndicate   and 
various   other   parties   at   a   commission   of    25   per   cent, 
payable  as  to  one-fifth  in  c.ish  and  the  balance  in   fully 
paid  shares.    Thus  it  comes  to  this,  that  the  vendor  syndi- 
cate receives  37,000  shares,  out  of  which  two  of  its  agents 
get  10,000,  and  a  commission  of  about  25  \kt  cent  for  its 
services  in   giving  a   guarantee  to  place   210,000  shares. 
The  directors  are  holders  of  stock  in  the  syndicate  and 
participate  largelv  in  the  profits  of  the  flotation,  wliile  also 
sub'^cribing   (under  sub-underwriting  arrangement,-)    for 
the  shares  now  nffered.     .\11  the  contracts  are  t;iven  in  the 
prospectus  in  a  manner  which  exemplifies  the  beneficent 


112 


////:■  liCOXDMhS  Ol-   MIMXG 


"licrati'in  of  thr  toiiipanio  Acl^.  l-"ii;.illy.  it  i,--  .stated  that 
John  layliT  iS;  Sons,  whu  inili\  ichialK  ari  niL'nibc-r.s  of  the 
syndicate,  ami  two  nf  whom  are  also  ilirector.s,  have 
ajjrecd  to  serve  the  eonipanv  a>  nianas^'ers  and  consnltini; 
entjinecrs  in  consideration  nf  receivini,'^  £850  per  aiinutn  in 
salary,  office  rent.  ttc.  "and  in  additi"n  j.l  jier  cent  of  the 
net  profits  distnhiued  hv  the  coni]);m\-  in  every  year, 
whether  in  th.e  sliai)e  of  ca>h  or  shares,  hnt  such  additional 
ri niniuT.'i'ion  ■-hail  not  exceed  in  an}  nne  ytar  the  sum  of 
£2,500."  It  appears  to  us  that  the  terms  and  coiulitions 
arc  fair  enough  and  that  the  jirofessimial  services  of  the 
enL^ineers  are  secured  ^n  a  decidedlx  reasonajjle  hasis. 
Concerniiiu  the  value  of  the  mine,  we  cm  express  no 
opinion. 

Jiihn  Taylor  &  Sons  has  existed  for  thn.e  tjenerations : 
the  Hrm  bet^an  by  undertakinjL^  the  direction  of  mines,  and 
eveiititall\  also,  in  certain  cases,  as  wf  have  seen,  it  has 
assumed  [lart  (jf  the  resjmnsibilit}  of  lindint;  the  capital 
necessary  for  their  development  ;  thus  the  t'ni;mcial  side 
<:;re\v  out  of  the  professional.  With  il;e  l-.xploration  Com- 
pany. Ltd..  the  purcha.-e  nf  proi'it.able  luim'S  led  to  the 
technical  manaseiiu'iit  of  them  <iftcr  their  ac<|uisition. 
lliuh  companies,  the  one  distinguished  bv  the  possession 
(if  a  lot  of  old-fashioned,  but  sound,  niininp  experience,- 
the  iither  assisted  '  \'  the  capit.al  of  a  ,!;rt;it  Jewish  family, 
have  been  distinctl\'  successfid.  The  Exploration  '.'om- 
pany  is  a  limited-lialMlitv  company  which  makes  a  busi- 
ness of  jiromotinti;  minins.;^  jiniperties.  I'.ver  since  ll.'un- 
ilton  Smith  induced  the  Rothschilds  to  take  part  m  tlie 
organization  oi  this  company  and  it  was  followed  by  the 
Mining'  and  l-'iiiancial  Trust,  the  Mines  Developnient 
Company  and  other  similar  undertakings,  there  has  been 
a  steady  -rowtli  in  exploration  companies  uf  every  kind. 
\\'e  refer,  of  course,  to  those  interested  in  \iiierican 
mines,  for  Soutli  -\frican  linance  covers  a  field  cpnte  aj)art. 

In  London  the  formation  of  land  and  finance  corpnra- 


soMii  .isrr.CTS  nr  mixim;  rix.ixcn   n^ 

tiMns  has  ,.rnc.c>l<.l  uiih-ut  limit,  a  lar-u  pait  ni  liio  in- 
diurstihlc  tinaiu-ial  paiuT  n^w  lluuvriiii,'  in  lluii  city  Wm^ 
orihis  description;  l.ut  it  is  nulv  nf  late  that  the  same 
manifestation  of  mininir  activity  ha^  heo  nie  apparent  m 
New  Ynrk,  There  are  so  many  ■American'  an-l  ■rnited 
States'  ami  Mexican'  Finance.  I'.Nploratinn.  Develop- 
ment, Secnrities,  Investment  and  Trospectins  c.mipaiues 
is  extremelv  diffuult  t..  i)revent  eunfu.Mon,  thnai-h 
ilaritv  of  name,  hetween  the  few  snhstantial  con- 

hemeral  creations.    This 


that  It 
mere  sinii 

ccm,s  and  the  larger  mimlier  of  e] 
activity  in  the  financial  incubaf-r  is  due  lar-ely  to  the  suc- 
cess of  the  h:n,t;lish  companies,  hut  more  particularly  to 
the  conspicuous  position  anpiircl  l.y  the  (  hiLT-enhenn  h.x- 
ploration  Companv,  one  .  f  the  many  channels  tlimu-li 
which  llnw-  the  irr'.pres.-il.le  tinancia!  ener-y  of  a  lari,'e 
family  <'\  extremely  clever  mer.  'Iheir  success  has 
rtjanize  for  the  same  intrixises.    Min- 

m 


prompted  others  to  ore 

en-ineers  who  have  -rown  t;Tay  in  active  service  nave 
vie-we.rwith  chat^rin  the  wealth  aoiuired  hy  nne  or  two 
of  their  own  profession  wh.mi  financial  p.articipatinn  has 
made  rich  in  a  few  ve:irs.  and  have  come  to  the  conclusion 
tliat  thcv.  too,  wnnhl  take  their  part  in  the  ni-re  lucrative 
liranchcs  of  that  manv-side<l.  diversified  and,  elastic  occu- 
pation which  is  covered  bv  the  comprehensive  term  of 
"the  minini,^  business.' 

Hence  the  partnerdiip  between  eii-ineers  and  bankers, 
en'dncers  and  promoters,  eii^in' crs  and  adventurers,  eii- 
<ri,?eers  and  irresponsible  .schemers,  until  the  financial 
arena  has  bec.nne  as  much  nf  a  medlev  as  Hie  sta-e  of  an 
opera  a^  the  moment  -  1  the  -rand  climax.  A  man  a'  b'rty 
is  either  his  own  doctor  ■  r  a  t". " '1  :  an  eii-incer  who  has 
surveve.l  mankin.l  Irnni  Chin.a  to  Pern  needs  n<.  advice: 
vet.  could  we  but  jireMime  -n  friend.diip.  wc  would  ~ay 
'to  him  that  the  prnm-tinn  of  companies  is  entirely  outside 
his  professional  trainin-  and  is  best  left  to  those  that  are 
lired  t.^  the  business.    Many  a  good  engineer  lias  been  lost 


ii 


114 


77//:  liCOXOMlCS  Ol-  MIMXu 


in  the  un.>ucce>>iul  i)r()ni()ti.T  ;  (Hic-  iiiaii,  with  iiuiri'  of  the 
financial  instim-t  tlian  the  prntVssiunal,  wins;  but  lur  every 
such  case  a  hundred  wreck  tlieir  careers  in  their  eagerness 
ti)  drive  crooS-cius  to  weahli. 

It  is  a  difficuh  problem;  the  engineer  is  entitled  U<  \u> 
share  of  the  profits  of  mining,  and  he  should  receive  a  re 
ward  no  less  than  that  of  the  promoter.  Should  he  there- 
fore become  a  partner  with  the  capitalist?  The  same 
(piestion  has  often  arisen  as  between  the  architect  and  ihi' 
contractor;  an  architect  can  join  with  the  contractor  in 
the  risks  of  the  building  trade;  he  may  himself  become 
a  contractor  and,  not  content  with  making  drawings  onlv, 
proceed  to  build  the  structures  which  he  designs.  Never- 
theless, the  <livision  of  the  work  and  the  .separation  be- 
tween the  two  occupations  is  to  the  gain  of  the  individual, 
no  less  than  of  the  community.  It  is  again  a  (luestion 
whether  the  shoemaker  should  stick  to  his  last  or  take  up 
a  task  which  belongs,  by  fitness  and  by  custom,  to  the 
tailor. 


{■': 


SOME  ASPECTS  OF  MINING  FlNANCE-11 

I  K.litiirial,    Hcccmher    5.     I9uj) 

\\\-   have   seen   more   than   one    [)r()s])fctu>.   issued   nf 
late  hv  txi)l(jrati()n  conipanii.>i  (ir^'anizcd  in   New  York. 
in  the   pages  of  whicli   reference  has   been   made  to   the 
suece.s>es  oi  similar   undertakings   in    London   and   else- 
wiiere.      Several    EngHsh    organizations    are    ([uoted    by 
name  as  examples  of  this  kind  of  business  activity,  but  it 
indicates  how  little  is  known  concerning  the  ins  and  outs 
of  the  Lordon  arena,  when  three  or  four  corporations, 
of  entirely  dissimilar  character  and  methods,  are  given 
as  models  for  American  enterprise.     (  )ii  the  other  hand, 
the  me-c  fact  that  London  has  been  the  leading  mining 
market  of  the  world  since  the  modern  developiuent  of 
mining  began,  warrants  our  turning  thither  for  examples 
of  well   -onsidered  methods  in  the  management  of  finan- 
cial organizat'ons.     By  the  mining  men  of  this  country, 
the    Kxi)loration    Company    has    long   been    held    as    the 
typical  London  house  making  a  business  of  promoting 
ir.ining  undirtakings.     In  many  respects  there  is  a  war- 
rant for  this,  altlunigh  it  nuist  not  be  assumed  that  even 
this  highly  reputable  concern  has  been   unifomdy   suc- 
cessful.    A  few  y  -TS  ago  it  illustrale<l  the  dangers  of 
ill-considered   and    reckless   finance,  by   taking  up  mines 
in  Australia,  for  instance,  without  much  regard  for  busi- 
ness caution:  and   finally   embarked   in   tramway  enter- 
prises in  Paris  which  entailed  a  loss  of  fully  $3,500,000. 
The  Exploration  Company  has  paid  for  its  experience, 
and  in  returning,  of  late,  to  conservative  mining,  it  has 
recovered  nuic'i  of  the  ground  lost  during  a  period  of 
poor  administration.     Experience  teaches,  and  whatever 
methods  this  company  may  now  employ  are  those  there- 
fore  which,   after   trial,   appear   most   likely  to   eliminate 


llt> 


Tim  LCUXOMJCS  Ul-  MIMXu 


the  risks  u.'  u  unua  a>   imicli  a.-   po>MliU-.   wliilc   at   tin- 
same  lime  K'viiiy  tliat  niiiil  pro  quo  wliicii  i.-.  the  c.-.^cncc 

of    MJimil    lui.MlR'SS. 

Sunic  ijf  ihc  rui-'MU  meiliuils  adoi)tcil  in  cuniicction 
witli  well-known  mines  will  prove  ^uy^e^live  to  those 
wii'i  ma\'  Mt  mil  nn  ilic  .^auic  ([iK>t. 

When    llie    lixploraliun    Luinpanv    aci|uireil    i^l    ( )ro 

mine  lhe\  look  an  option  lo  purelia.-e,  irom  Mr.  ll:iL;j;in 

and  hi»  paruur^.  ilie  whuU'  of  the  >hare.-  of  ilie  Ainen- 

ean  .Mniiiii;  L'ompan>.  wliieli  owned    V.\  •  )ro  nnne,  and 

then    formed    ihe    lul_l;ll^ll    cnnii)an>     willi    a    capital    iif 

i(juo,c_x)u;  this  repre>ented  llie  ca~li   purchase  C(jiiM(iera- 

lioii  fnr  llie  properly,  plus  workiiij;  capital,  and  left  Mime 

few   tlu)U>aiid    --hareN  unissued,   in   ihe   hands  of   what    is 

now    111   (.)ro    Mininj;  &    l\aihvay    Company.      In   other 

words,  the  i''.x])Ioration  C'oiii]iaiiy  tiinied  over  the  pri  ip- 

erty   complete  to   the   luigli>h   or<;anizalion   at   ah>olule 

co^t  and  without  adding  a  dollar  hy  way  of  profit,  and, 

in  addilinn  lo  all  thi^,  it.-elf  defrayed  the  co^-t  of  re,i;istra- 

lion  aiui  all  the  expenses  incidental  to  the  formation  of 

the    new    comiiany.      The    Exploration    Company    then 

solicited  snb.-criptions  from  its  friends  in  London  toward 

the  capital   of   lil    (  >ro    .Miiiinj;    iV    Railway    (_'oiii]iaiiy. 

charging    them    5    per   cent,   or   one    >lMllin_<;    j/er   share, 

which    r,  pre>eiit>.d    the    I'.xpioraUon    Loni]iauy's    prolit; 

hut   iiiaMiitich   as   the   vendors  took   a  large   number   of 

shares  in  lieu  of  cash,  and  could  not,  therefore,  he  asked 

to  i)av  till.-'  one  .shilling  ;    r  rhare.  and  as.  of  course,  llie 

aiiiouiit   Mihscrihed   by   the    l^xploralion  Company   itself 

ilitl    not    represent       "N'    proht    ( a>    it    also    had    to    pay 

commissions,  expenses,  tlotation  charges,  and   so  fi.irth, 

out  of  the  priilit  il  did   receue  in   ihi-.  ir.:inner).  the  net 

gain  of  tills  large  transaction   ilid   not   exceed   ii5,(xx). 

It  is  perhaps  the  only  instance  in  which  an  Rnglish  coin- 

pan\'   ha>  aci|uired  a   properly  at  absnlute  bedrock  cost; 
-    -  -  •    ■  ,.u    .,f  .1,,,   ._,..,..^. ..;„,, 


^uMi:  .isriiCTs  or  Mixr.'c  nwixci- 


\v 


It  (.aiiiiMt  1r'  >aia  thai  thi>  nuth-l  ,,i  trratiiii;  a  pmiKTty 
is  a  good  prcccduit  ^r  a  naM)naljlc  husiia.vs  propnsilion. 
In    the   case   '-f   tin-     iMinboy    luiiu'.   \\h-    l^xploratioii 
Company    foUowr.l    what    i>    knn'.sn    in    I,.in.l<,n    a>    ilu' 
llanu'.tcm  Smiili  iiractuc;  iliat  i>  to  say,  tlu'y  purchased 
51  per  cent  (It  the  -liar...  nf  the  American  conipanv,  and 
merely   suh-crihed.   and   imhiced     their    friend-     tn    suh- 
scnhJ.   for  the   -hares   m   that   C'.inpai.y.     SvihsequeiUly. 
finding  this  scheme  <hd  11. .t  uork  at  all.  tluv   jiersnaded 
the  American  directors  to  sell  out  the  uhole  l)n>iness  to 
a  comiKiny  fornieil  in   l.oiidoii,  and  iIk-  American  -tock- 
hulders   now   hold   shares   in   the    luiglish   compaiu,   iti- 
-tead  of  the  l-jiglish  stocklndders  holding  shares  in  the 
American.      This  i-  also  a  ]iractice  which  doe>  not  at  all 
commend  itself;  for,  while  51  per  cent. -if  course,  gives  the 
control  of  a  projierty.  it  is  obvious  that  the  sale  of  a  few 
thousand  -hares  vsill  transfer  that  control. 

The  practice  now  ad-pled  by  the  I'.xnloration  Com- 
pany is  appro.ximately  as  follows;  If  a  mining  property 
is  brought  to  the  notice  of  any  one  of  it-  represeiiiatuvs, 
and  he  (an  engineer)  is  satisfie.l  with  the  i)reliminary  in- 
vestigation, they  arrange  to  take  an  opti.m  upon  the 
propertv,  preferably  for  about  three  months;  and  if  it 
then  holds  up  to  a  complete  and  searching  examination, 
they,  prior  to  the  expiration  of  the  option,  form  a  com- 
pany in  Lonilon  to  ac(|uirc  the  mine,  making  themselves 
responsible  for  the  purchase,  ■-ttering  to  tluir  friends  a 
participation  m  the  und.Twriting,  for  which  probably  a 
commission  of  5  per  eetit  in  cash  is  paid;  then  they  make 
a  public  issue,  and  if  the  business  is  of  sufficient  dimen- 
sions, they  reserve  a  certain  number  of  shares  tor  prefer- 
ential allotment  to  the  shareholders  of  the  Exploration 
Company,  should  they  be  disposed  to  make  application 
for  the  same. 

The  capital  of  such  a  new  company  is  fixed  at  the  cost 
price  of  the  property,  plus  whatever  may  be  necessary 


I- 

if; 

ili 

I  I 


IIS 


mil  hCO.\()MlCS  Ul-   .\lL\l.\u 


lor  workiiij,'  capital  ;  and,  ;n  addiiioii,  a  ^inn  from  5  lt> 
10  iKT  cent,  accordiiii^  to  llic  .-izc  of  tlu  iiropcrty,  is 
,si't  asidf  as  tin-  promotirs'  ( Mx])lorali(iii  tinnpany's) 
prutit;  iinlf.s.s  a  luiiK,  on  I'xamiiiatioii,  sliow>  tliat  it  can 
stand  siicli  pronioicr>'  p-otit,  and  ^till  procnl  a  j^ood 
mining  ciiancc  of  j^'ivinj^  the  sliarcliuldcrs  tlicir  money 
back  with  a  sul).staiitial  rate  of  interest,  it  is  not  consid- 
ere<l  Ljood  enough  to  ])iit  on  tlie  market.  (  )f  course  tlie 
amount  of  commission  winch  the  promoters  should  add 
t(j  the  piircha.se  ])rice  wonid  vers  larjjelv  dipend  n|)on 
the  >!/(.■  of  the  ])roi)eit\.  lor  what  nn,L;lil  he  a  reasonable 
percentaj^e  on  ;i  ])iirchase  price  of  $500,000  woidd  be 
excessive  and  unreasonable  on  a  pro])erty  of  $5,(xk),(kx). 
The  [ihrase  'underw  ritini;  the  capital'  means  that  the 
organization  i)riii^inp;  out  a  company  with  a  capital,  say, 
of  £i,fKK),ooo,  would  1)\  thenisehes  and  their  friends  un- 
dertake to  subscribe  for  the  whole  or  an_\  |)ortion  of  the 
capita!  not  taken  l)y  tlie  public,  ami  in  consideration  for 
such  j^uarantee  they  would  be  paid  an  underwriter's 
commission  of,  say,  3  ])er  cent.  The  forei^oin.ij,  of  course, 
only  applies  to  minini^  properties  too  i)i(r  for  the  jiromot- 
intjj  orj^anizations  to  handle  alone;  but  in  the  case  of  any 
mine  which  ccnild  be  {)urcliased  and  e(|uipped  for  say, 
$500,000.  or  even  $i.o(xxooo,  if  the  property  was  consid- 
ered to  have  attractive  prospects,  the  I'.xploration  Com- 
pany Would  be  much  disposed  to  take  the  whole  f<.ir  its 
own  account,  and  work  it  as  a  private  business. 


( 


SOME  ASPECTS  OF  MINING  FINANCE-IU 

(l.-lu.irial.    Dcccrnlitr    i;.    19"J) 

Wo  havo  ikscrihcd  some  of  tlic  imtli.HU  adopted  hy 
conservative  liouses  engaged  in  the  aciiuisitioii  of  nim- 
iiig  property.     'I'lure  are  several  well-nianaRed  financial 
organizations  in  London,  sncli  as  the  L'on>oli(lated  Mnies 
Selection   Company,   uiiich  do  imt   tloat   mines  'ufT  their 
own  bat,'  as  it  were,  because  a  single  undertaking  of  any 
magnitude  would  entail  the  absorption  nf  mo-t  of  their 
capital;  therefore,  instead    if  u-ing  up  their  resources  m 
one  big  deal,  they  participate  in  several  ventures.     Either 
they  obtain  an  allotment  ..f  interest  in  a  business  about 
to    be   issued    by    another    llou^,e,    an<l,    having   had    the 
mine  examined  by  their  own  engineer,  they  accept  the 
participation;  or,  their  agent  having  secured  an  option 
on   a  likely-looking   property,   they   offer  it   to  a  larger 
concern  and  obtain  a  consideration,  as  well  as  a  partici- 
pation, for  their  instrumentality  in  introducing  a  profit- 
able deal.     I'urthermore,  many  successful  companies  of 
this  kind  do  not  buy  mines  at  all,  but  purchase  blocks  .if 
.shares  on  the  open' market,  aher  their  engineer  has  in- 
vestigated conditions  at  the  mines;  that  is.  they  maintain 
a   staff  of   trustworthy  engineers   and  obtain   correct   in- 
formation concerning  the  ore  reserves  and  future  pros- 
pects   of   mining   properties    already    listed    on    the    ex- 
change, utilizing  this  first-hand  know!e<lge  to  acquire  an 
interest  whenever  the  quoted  price  warrants  a  purchase. 
Should  their  holding  become  large,  they  can  usually  ar- 
range to  obtain  lepresentation  on  the  directorate  of  the 
mining  company. 

The  Consolidated  Mines  Selection  Company  is  the  re- 
suh:  of  the  amalgamation  of  the  African  Metals  Com- 
pany and  an  older  exploration  company,   organized  by 


If 


ij 


Si! 


l•2^\ 


nil:  IXOXOMhS  (>/•   Ml\l.\u 


Mr.  Uaiur  AK  Ultiii.:!,  naiiu'l  llii.  Miius  Si'lcctioii 
Loinpaiiy. 

TIic  MiniiijT  and  l''iiiaiici.il  Iru.st  iiia\  alsi)  be  (lunicil 
as  liaviii;'  been  fuiiinkd  iiii  a  >eii>ibli.-  basis,  ami.  al- 
tli'iiii^h  it  is  a  cuiicerii  uliah  lia-~  \\ith,lra\\n  iiitd  tlie 
privaiy  ul  iiiaciivit\ .  it  |)la\nl  an  innmitant  part  in  tlic 
'levelupuRiit  of  many  Mlcbratcd  Anurican  nums. 
ain(iii,i(  \sliitli  the  l)e  Lamar,  m  Idaiio;  th''  Mlkln  iri.  iii 
^^)Iltana,  and  tiie  liarijua  llala.  in  .\rizi)na,  may  be  iii- 
staneed.  Mr  '1".  A.  Ccnnett  wis  the  foniidi  r  iif  thi-- 
conipanw  lie  i.;ave  his  services  as  mining  en};nieer  mh 
the  nnderstanding  that  he  was  to  reeeive  no  salar\  or 
retainer,  but  a  lar^'c  share  ia  a:i\  ini-ine>^  re-ulimt;  ir^Mn 
his  active  search  for  a  pood  nnne  at  a  fair  ])rice.  lie 
stipulat.  d  oiiI\  that  his  e.xpeii^i'S  >Iiould  be  paid  wlien 
he  ua>  aetnalU'  in  the  field.  This  was  a  fair  and  practi- 
cal scheme  It  Worked  snceessfuUy,  imtd  the  di.sap- 
pointnunt  of  the  Hannia  llala  ^ave  a  severe  cheek  to 
the  further  expansion  ni  the  eoni[)any. 

The  Miiu's  L'ompany,  L.td.,  was  another  concern  wTiicli 
took  an  important  part  in  .\nieriran  minini.,'.  It  was 
fornitd  by  Mr.  jidn""  Darlington  and  others,  and  was 
rispon.silile  for  biinL;inL^  out  the  \'ankee  ( lirl.  .\ew  (ius- 
ton  and  .Ini'. rican  liille  mii'.es  at  Red  Mountain.  Cohj- 
rado,  but  it  lo.-t  its  standing  thronLi^h  the  over-capitali- 
zatitjii  which  marked  the  last  of  these  three  important 
flotations. 

Then,  there  are  all  sorts  of  venturesome  concerns, 
which  make  a  brief  splash  or  a  lonij-continued  splutter, 
following  risky  methods  which  may  be  described  as 
financing  nn  the  edge  of  a  razor.  Lvery  once  in  a  while 
they  get  a  brief  notoriety,  commencing  in  the  financial 
press  and  ending  in  the  police  court.  Several  exposures 
of  folly  and  trickery  have  discrt-ditetl  ruining  during 
recent  \i'ars.  hut  the  drear\  messes  of  liottcMiilev.  Hooley 
and  Wright  are  brushed  aside  as  episodes  '  >  be  forgot- 


sn.MF.  .isrr.cTS  or  mixixc  pinancf.     121 

ten  with  ilu  iiidc^-t'iu-v  lit  ;i  Imrrir,!  t'liinTa'.  In  truth, 
they  ri'iJrcMin  but  the  iiK^rc  (.xtrfinc  luriiis  uf  r(.\kU'ss 
thiano-,  wliicli  arc  no  m<5rc  a  part  uf  IcKitunatc  mining 
than  thf  iniquities  nf  thf  race-course  are  necessarily  a 
part  1  t  tiic  business  of  breeding  good  hotses. 


m 


M 


SOME  ASPECTS  OF  MINING  FINANCE-IV 

(KJiturial,   Iicttmbcr   ^4.    190J.) 

Many  'develoiJiiient'  and  ■(.xploration"  companies, 
wliich  start  witli  t;ood  iiuciUicjns,  slide  down  an  easy 
desL-i-in  into  ur(ln,L;-l.loin,^^  nK-rily  fnmi  the  lack  of  innd>. 
Let  tlie  organizers  of  sueli  enterprises  realize  this  brutal 
faet:  \oU  cainrnt  finance  legitimately  without  money.  To 
such  gentlemen  a>  are  organizing  'exploration"  companies 
we  would  give  the  advice  which  the  Austrian  general, 
Monticucoli,  is  said  to  have  given  to  Maria  Tiieresa,  when 
he  told  her  that  three  things  were  neces>ary  for  waguig 
war  succcssfuUv — the  tirst  was  money,  the  second  was — 
money,  and  the  third  was— money!  Unless  a  financial 
company  has  funds  sufficient  to  carry  out  its  undertak- 
ings, it  will  other  he  >(|ueezed  again>t  the  hard  wall  of 
adversitv,  or  it  will  .-loop  to  (piestionahle  practices.  It  is 
as  difficult  for  a  promoting  concern  to  be  tmiformly  hon- 
orable, when  trying  to  carry  out  big  undertakings  with  a 
small  capital,  as  it  is  for  the  wicked  man  to  enter  heaven. 
Xo  array  of  names,  or  nndtiiili.-ity  of  business  interests, 
will  >ufficc.  The  iimliii'  Jcs  clioscs.  which  pursues  the 
p.mr  financial  comjiany  trying  to  push  large  operations,  is 
one  of  the  brutalities  of  existence. 

( )n  the  other  hand,  the  utilization  of  a  very  large  capi- 
tal, ni  actual  purchase  of  properties,  is  not  within  the 
scope  of  the  tvjiical  exploration  company.  Such  action 
leads  to  a  crippling  of  resources,  because  it  requires  the 
further  use  of  funds  in  the  suj.iort  of  the  market  fo"  'ts 
own  issues.  .\  comi)a,iy  which  brings  out  a  big  mine,  and 
becomes  itself  a  large  purchaser  of  the  stock,  is  apt  to  be 
tin-  hint  .-f  surce--fid  '',ar  attacks,  unles>  it  i>  in  a  position 
to  jirotect  its  holdings.  The  story  of  Lake  \'iew  Consols. 
Le  Koi.  and  other  mines  which  have  sutYerL-d  uueer  vicissi- 


SOMF.  .ISPECTS  OF  MFXIXC  FIX.iXCF       12^ 

tildes  on  tlu'  stock  (.■xchan.m-,  illustrates  hnw   dangerous 
it  is  for  an  issuin<;  house  to  be  'lonjj;'  on  its  own  shares. 

An   exploration   company,  primarily,   is   not   an   invest- 
ment cori)oration.  hut  a  house  of  issue;  its  most  profitahle 
avenue  of  ener«;y  is  in  scouting.:  for  good  mines,  in  order, 
hv  siftinir  ri  large  number  of  likely  properties,  to  secure 
the  option  finallv  on  one  which,  after  thorough  exaniin.i- 
tion.  it  can  commend  to  its  clients.     In  this  busines-;.  as  in 
all  others,  it  is  a  mistake  to  confuse  the  operations  of  a 
broker  with  those  of  a  principal.     The  exploration  coin- 
p.inv  will  find  it  advantageous  to  act  mainly  as  a  corporate 
broker,  for  the  buyin.i.;;  and  selling  of  mine-.    Therefore,  a 
capital    -ufficient    for  active   scouting,   and   the   thorough 
investigation    which   comes    after   picking   out    the   mines 
that    warrant    it.    together    with    necessary   payments    for 
options,  should  suffice.     .\  capital  of  £100.000.  or  $500,- 
000.  should  be  amjile   for  ,dl  work  of  this  kind,  during  a 
period  of  several  years,  but  it  must  be  available  as  cash. 
With  such  a  capital,  it  is  iiossible  to  pay  a  :;o  per  cent  divi- 
dend on  the  completion  of  a  successful  deal,  while,  at  the 
same  time,  there  is  money  enough  to  meet  the  t'xpenses 
of  a  prolonged  and  extensive  search   for  that  most  desir- 
able business — a  profitable  mine  with  possibilities  of  de- 
velo[unent. 

Having  finally  found  and  secured  a  good  mine  at  a  fair 
]irice.  the  next  ^te])  re(|uires  as  nuich  judgment  a^  any 
which  have  precdled.  Companies  whicii  trv  to  make  a 
gr.  ij  -onp  on  one  transaction,  regardless  of  rhyme  or 
f  -  I  dwavs  meet  with  a  most  miserable  sma.sh  sooner 
or  later— 'isu.allv  sooner.  In  these  matter-,  as  in  nio<t  of 
the  affairs  of  life,  it  i-  both  right  and  .good  jiolicy  to  take 
a  large  view  of  business,  and  build  it  up  by  uniformity  of 
fair  dealing  ;md  ctuitious  finance.  .\  comptmy  which  c;ui 
make  two  or  three  sound  deals,  without  over-capitalizing 
;i  mine  or  sanddiagging  ;i  mine-owner,  is  tissured  ol  a 
prosperous  career,  for  such  a  reputation  will  bring  to  its 


"  >i  1 

I: 


L'l 


run  EcoxuMics  ui-  .i//.\7.V(; 


iiIVr-i-  a  lar,L;i.'  .'-liaii'  ni  lik-  l)i->t  mines  that  loiiiv  I'j  market. 
I  'u  the  utlier  haml,  experience  shows  iliat,  with  rare  ex- 
ee[)tious,  mu.^t  liuaiiee  e(jm])anies  which  have  niade  >  iie  ur 
two  successful  tlntations  hectjinc  si  >  L;reeil\  that  tiie\  pro- 
ceed to  over-capilah/.e  their  next  issue,  and  s.rani  to  mai<e 
so  !ar};e  and  (|uiei<  a  protit  as  td  end  in  a  nnM.ralile  liasco. 
The  American  iieUe  llotaiiou  (which  was  liniU;;hl  out 
wiiui  the  <  iu>t"n  and  N'ankee  t  lirl  mine.-  had  \\<mi  a  re])U- 
lati.-n  fur  ihe  Ived  .Mountain  di.-trict.  and  to  the  CMUipaiiy 
which  issued  them)  is  a  case  ii.  point. 

Ihit  we  are  treachnt,''  in  danL;erous  Ljrnund.  where 
guides  do  well  in  w.irniiiL,r  ihe  wayfarer  while  refusintj 
themselves  to  i;o  forward.  In  tlie>e  matters  an  intelli- 
gent cojjnizancc  of  what  lia-  happened  to  others  is  nnich 
cheaper  'Ikiu  the  hitler  pill  '  i  ex])erience.  which  is  the  in- 
evitable medicine  doled  out  to  the  heedless  and  unwary 
who  tread  along  the  difficult  path  of  mining  finance.  .\!  a 
time  whc-n  U'w  exploration  companies  of  every  kind  are 
heing  organized  in  Xew  ^'(Tk,  it  will  not  he  lie'.d  im- 
proper to  (hveil  ui)iin  tlic  dangers  which  they  may 
encounter,  tlie  success  which  they  nia\-  win.  and  the 
stiuiulu-  tl.ev  can  ailord  to  legitimate  mining. 


m 


SOME  ASPECTS  OF  MINING  FINANCE-V 

(  Kdltonal.   December    3'-    1903' 

One  form  of  unpractical  finance  wliicli  is  prevalent  in 
this  country  is  unknown  in  lingl.Mul.     We  refer  to  the 
orgariyri'ion  of  cnnipaincs  with  a  lar^e  nMinnial  capital, 
-av,    i.o(JO,ooo  shares,  a  part  of  which  is   i,Mven  out  as 
lullv  i)aid  stock  in  exchani;e  for  the  mine,  while  the  bal- 
ance i.-  peiliUeil  ai  a  hi-"  discount  to  the  public  in  order 
to  secure  workin<;-  capital,  and.  mi  many  cases,  to  make 
a  qtiick  pnjfil   for  the  cnncu-n  at  the  hack  of  the  opera- 
tion.    Such  practices  are  rendered  imiios-ible  in  I'.nf^Iand 
by  the  Companies  .\ct>,  regulations  covering-  the  organi- 
zation and    procedure   of   corporate   enterprise.      Under 
the  lax  statutes  obtaining  in  several  States  a  syndicate 
can  take  t)ver  a  small  nmie  oi  a  mere  prospect,  organize 
a   $i.(Hj<j,0(X)  comi)an\,    pay    the   owntrs    ( tliemselves,    it 
may  be)  350,000  sharts,  carrying  no  liability,  and  seb  the 
minoritv  interest  or  remainder  of  the  stock  at    10  or   13 
cents:    sometimes    even    less,    especially    when    a    ■h.^ca! 
agencv.'  as  the  promoting  concern  i>  apt  to  call  itself. 
represents  a  number  of  mines  in  com  se  of  developu'.ent 
and  'pooh'  the  various  .-hare-  so  as  lo  make  a  combina- 
tion or  'bargain'   offer,  in   <  rder   Im  ]irocure   the   money 
needed  to  make  mines  out  of  hole-  in  the  ground.      1  he 
price   of   the   stock    is    raised   according   to   the   circum- 
stances,  and  among  these   circmnstanci  -   the   needs    of 
the  mine  are  apt  to  be  less  ,)f  .a  measure  than  the  facility 
with  which  the  stork  can  be  -old  to  simiile-minded  \)vo- 
ple  in  a  fool's  hurry  to  get  rich. 

There  is  an  enormous  amount  of  money  subscribed. 
and  mostlv  ]n>\.  in  this  wav  during  llie  c.uirse  of  a  yi'ar, 
especially  among  si  rvant  gnds.  clerks,  railroad  conduc- 
tors, tradesnieii  and  hard-wr)rking  people  with  small  sal- 


m 


V  I 

ii  i  I 


lliti 


/'///:   EtUXOMICS  Ul-   MIMXG 


arics.  Juwa,  llliiuiis.  Indiatia,  and  tlic  rct;i(jii.->  most  uut 
of  tuuch  with  [jriciiius  metal  mining,  arc  ti.rtilf  ticlil>  i<'V 
cntt-Tpribing  organizers  of  sticii  schemes.  (Jt'tice-liuIiKrs 
of  local  repute,  or  other  persons  of  some  nutoriet},  are 
maiie  directors  antl  are  given  blocks  of  stock,  to  the 
intent  that  they  may  serve  as  lures  to  the  people  in  vari- 
ous localities.  Then  reports  of  ]irogress  are  sent  in  by 
self-con^tltu;ed  'experts,'  and  'divi(lend>'  are  declared, 
out  I'f  the  >ubscriptions,  so  as  to  lia>ten  the  instalments 
on  the  -tiiek;  for  it  is  usually  sold  on  this  [ilan.  so  nnicli 
l)er  mi  nth  nut  of  the  earnings  oi  cnniparativel\  pour  in- 
ilividuals.  These  are  tlu'  midertakings  which  are  liber- 
ally advertised  in  the  dail\  jiress  and  in  the  illu.strated 
weeklies. 

I)ii;mg  the  recent  [irosecntion  of  a  not(jrious  mining 
promoter,  it  was  shown  that  out  of  i,_'5o,(kxi  shares, 
valued  at  $i  per  share,  in  a  company  ojierating  a  mme 
in  (  iregon.  there  were  is>ne(l,  and  held,  25  shares  in 
California,  14  in  Lanada,  n  in  Delaware,  iu6  in  Illinoi'>, 
J5  in  Indiana.  42J  in  \:<\\d.  l<\  m  Kan-as.  i()  in  Maine,  jj 
in  Maryl.'ind,  f^T,  in  Massachusetts.  14  in  Missi>si]ipi.  41) 
in  Missouri,  4S  in  Nebraska,  iS  in  Minnesota,  16  in  .\ew 
Jersey,  68  in  .\'ew  \'ork,  1)3  in  Pennsvlvania,  70  in  \\  asli- 
ington.  50  in  Wisconsin,  rmd  ihe  remainder  in  other 
. States  of  the  L'nioii.  This  di.^tribution  suggests  forcibly 
what  ettHrts  nui^t  h.'ue  lueii  made  to  sell  the  shares 
wherever  a  gullible  hea.l  bolibed  up. 

The  favorite  scheme  for  ^ucli  undertakings  is  a  'tun- 
nel' or  a<lit  which  is  to  jiierce  <i  mountain  and  imerce])t 
large  numbers  of  veins.  A  string  of  mining  claims  is 
easily  secured  d'v  a  merely  nominal  sum  in  a  half-de- 
serted portion  of  some  \\ell-kiui\\  n  mining  district,  and 
any  iireseiit  unproductiveness  is  extjlained  by  excess  of 
water,  cost  of  sli.aft-sinking  and  nthtr  ilr.-iwl)ack>,  uliicli 
are  to  i)e  removed  through  the  facilities  afforded  In- 
such  a  drainage  adit.     Ideal  cross-sections  exhibiting  a 


I 


soMi:  .isrr.CTS  op  .u/.v/.vc;  i-f.\\i.\cn     n*? 


multiiilicitv  of  veins,  an  extieniely  steep  contour  of  tin- 
surface,    and    ore    re-erve^    commensurate    with    tremen- 
dous ''.lacks.'  are  added  to  highly  colored  descriptions  of 
the  futnrc  of  the  undertakin^^     Sliare>  are  offered  at  lo 
cents,  to  be  increased  to  ^5  cents  within  a  spocitied  pe- 
riod, and  other  advances  may  ensue,  dependent  upon  tiie 
rephes  evoked  l.y  the  circuhirs  which  are  sent  out.  and 
the  advertisements  and  favorable  readins  notices  which 
appear  in  all  kinds  of  jiapers.  rehgious  and  old-fashioned 
periodicals  bein-  jireferred  by  ihi-  type  of  promoter.     A 
rather  unicpie  method  of  advertising  a  gigantic  minmg 
swuuUe   some    time    a.i^o    was    ihe    sendiiii;    of    'lecturers' 
throughout  the  country  on   a   special   railroad   car;   tlu 
duty  of  these  fakirs  was  to  tell   the  u-isuspccting  inhab- 
itants of  the  smaller  towns  \v  .v  fortunes  had  lieen  made 
by  investors  in  mining  shares,  and  to  expatiate  upon  the 
niillions    that    lay    idle    in    tlic    'treastire    vaults'    of    the 
property,  the  stock  tjf  which  was  offered  at   'rock-bot- 
tom' prices.     .\s  the  work  at   the  mine  ]>roceed~.  the  im- 
patience of  the  ignorant  investor  is  fed  with  accoimts  of 
rich    strikes,    veins    one    inch    thick    ■■ro>s!ng    a    working 
5   ft.   wide   being  likely  to  appear  as   'ore   5    i',.   across.' 
while   assays   of   specimens    of    walnut    size    are    (juoted 
under  the  guise  of    'averages.'      Wiien.  eventually,  sonic 
of  the  subscribers  cease  to  sef.d  in  their  instalments,  they 
forfeit  their  interest,  and  the  anxiety  of  the  survivors  is 
allayed  bv  reports  of   'well-known  experts'    and    'profes- 
fors,'   -vho  are  vouched  for  by  State  officials  or  country 
bank-managers  in   a  luagnificently   vague  manner  per- 
mitting of   easy   retreat.     Sometimes  a   withered   enter- 
prise will  receive  a  new  lease  of  life  by  reorganization  or 
consolidation    with     another    property    equally     worth- 
less, and  the  un-ophisticaled  :~h,ircholder  is  again  called 
on  to  contribute  oy  surrendering  his  old  stock  and  pay- 
ing an  additional   fee  for  the   new   shares.      .\nd    so   the 
mockerv  of  mini'iL'  goes  on.  until  the  money  suliscribed 


m 


ji- 


IL'S 


/■///:  liCOXUMICS  (>!■   MIX  1X0 


lias  all  \n\]\  u.-id  up  in  salarii^  for  ilic  insiders,  and 
linally  a  IidIc  in  i\\v  .^imnul  wiili  a  iluni|i  is  m'izliI  l)y  an 
natf  stuckhoUkr.  whose  first  touch  break.-,  down  the 
uhole  house  cjf  cards — marked  cards,  at  that,  'I'lie  South 
Sea  bubble  and  its  associated  frauds  of  ihe  year  17J0  have 
many  a  counterpart,  even  in  this  da\-  and  Lreneration. 
What  we  chierty  object  to  is,  they  are  described  as 
mining. 


MINING   FINANCE. 

The  Editor. 

SiK_l    ho|je   tliat   \ciur   artalcs   on    Mining   Finance," 
recently  ;niblislie(l  in  the  Jolu.nai.,  will  be   uidely  tvm\, 
and  uill  >erve  to  i;ive  the  public  better  ideas  on  tlial  sub- 
ject, and  especially  on  the  proper  function  of  exploration 
companies.     The    public,    even   that    portion    which   cmi- 
eerns  itself  at  all  abnut  the  subji.ct,  has  very  hazy  ideas 
of  tnininj^  finance.      1    have  even   met   niinmi,'  engineers, 
who   were   well   ui)  in   their  profession,   but    were  rather 
like  a  sailnr  on  Imrseback   wlicn  it  came  to  the  tinancial 
l)art.      If  p^'  pie   who  have   money   l<<  invest    U'.uld   (jiily 
look  into  this  matter   more,  there   would  be   fewi-r  cm- 
plaints  ai)OUt   mining  investments.      How   often   we  have 
seen  f.iirlv  i^ood  minin.g  propositions  hampered  by  capual 
out  of  all  proportion   to  their  value:  and.   on   the  other 
hand,  we  have  seen  mines  kept  back  in  their  development 
for  want  of  money,  which  culd  be  well  spent  ui)on  them. 
I  was  specially  iiUerested  in  what  you  have  said  about 
exploration  companies  and   their  jiroper  functions.     The 
popular  mind  has  been  snmewhat  confused  on  this  point. 
Ouite  a  number  of  pen])le,  I  hnd,  have  a  .general  idea  that 
;m   exploration   company   is   .somethintr   bkc   the  •lioldmi; 
companv'— that    ])erniciou>    modern    device,    which    has 
played  such  a  malignant   part  in   railroa<l  and  industri.d 
finance,  in  the  last  two  or  three  vears.    W'c  have  one  con- 
sjMcuous   example   of   the   -h'.Min.i:   company'   in    miiiin.L;, 
which   many   investors  know  to  tlieir   sorrow.     The  less 
said  about  it    the  better:  it  is  certainly  not  an  exploration 
company. 

The  greater  part  of  the  public  knows  the  exploration 
companv  onlv  througli  the  glowing  advertisements  of  the 
promoters  and  sjnck  peddlers,  whose  brilliant  imagina- 
tiinis  have  seized  ujioii  the  idea  of  exploration  and  finance 


130 


rilL  I-lU.\UM1lS  Ul-  MIXIXG 


(.niiipanics  as  capital  (kvice^  to  aid  in  tk'vcini,'  llic  iinsus- 
pcctiiij,'  outsider.  The  very  titles  are  alluring,  and  tliey 
permit  the  use  of  ^orscuus  pmspectuses,  unhampered  by 
any  rejjard  Inr  truth.  If  the  ijmmoter  lia>  'Hie  particular 
mine  t(j  de-crilie,  he  tiiid.^  incdnvenicnt  limitations;  the 
possibilities  nf  lindini;  an  iiidelinite  nunilicr  ^ive  his  men- 
dacity full  scope,  r.ut  this  is  inevitable,  since  all  pood 
things  mav  be  i)er\erted  to  evil  ends;  and  this  incidental 
abuse  does  not  destroy  their  real  usefulness. 

It  does  not  seem  to  me  that  we  have  ever  had  a  really 
satisfactor\-  niinini;  market  in  this  country.  1  do  not 
mean  bv  this  a  mining;  stock  luarket,  Inu  a  market  in 
which  mines,  or  pood  jiroperties,  can  be  disposed  of  in  a 
.satisfactory  way.  The  jirospector,  or  the  niinini^  en,t:;ineer. 
who  has  a  prondsiu},'  mineral  property,  needinji^  capital  for 
its  develoiimeiU.  often  does  not  know  where  to  go.  If  he 
ha^-  no  friends  with  niomy,  it  is  not  an  easy  matter  to  se- 
cure his  capital  or  dispo--e  of  his  property.  Too  often 
he  falls  a  victim  t'o  the  promoter  or  to  a  broker  of  the 
consciencek'ss  class,  who  reaps  all  the  profits.  The  ex- 
ploration company — or  companies,  for  there  is  room  for 
more  than  one  or  two — of  the  ritjht  kind  would  help  very 
materiallv  in  makint.;-  the  market  that  is  wanted.  Such 
companies,  too,  when  well  established  wonld  be  in  a  posi- 
tion to  command  the  attention  of  investors,  larc^e  and 
small.  Oi  conrse,  they  will  be  liable  to  make  mistakes 
sometimes;  but.  with  any  sort  of  pood  management,  the 
proportion  of  such  failures  will  not  be  larpe, 

I  hope  vou  will  be  able  to  develop  further  these  ideas, 
whi'di  I  have  expressed  in  wliat,  I  fear,  is  a  rather  incon- 
sequent w;iy.  I  want  to  see  general  investment  in  mines 
increase;  for  I  know-  that,  if  reliable  ways  of  doinp  it  are 
provided,  such  investments  will  ]>e  far  better  for  the  pub- 
lic than  the  putting  of  their  money  into  Iilind  pools  and 
watered   industrials.  Ixvicstor. 

New  York,  Dec.  C,  1903. 


I 


I 


RESUIiNG   IN   UNDERGROUND  WORK. 

(December    lo,    ly^J.) 

'I  lie  Editor. 

Sir — The  article  appearing  in  your  issue  of  September 
12  (referring,'  to  the  urigin  cif  the  term  Te.sue'  as  a[)pheil  to 
uiidergrouiid  work)  brings  lu  tniiiil  j-onie  jjractical  e.\])eri- 
iiieiits  carried  out  by  the  writer  a  tew  years  ago,  in  whicli 
an  attempt  was  made  to  determine  tlie  relative  merits  of 
this  system  of  dealing  with  narrow'  veins  of  high  grade, 
as  against  the  method  of  breaking  the  reef  and  adjoining 
rock,  together  with  an  id'  a  of  sorting  out  a  high  per- 
centage of  the  non-auriferi  lus  product.  In  the  cases  cited 
the  a<ljoining  rocks,  or  wrdls.  of  the  vein  contained  no 
gold,  the  inclinati(jn  of  the  vein  was  85°  from  the  hori- 
zontal, and  the  section  of  footwall  taken  out  in  the 
first  instance  was  separated  from  the  vein  by  a  clear  plane 
and  was  broken  without  disturbing  the  ore.  The  average 
width  of  heading  or  breast  in  the  first  operation  was  30  in. 
and  the  total  width  of  stope  after  the  reef  had  been  ex- 
tracted was  36  in.  In  the  .ecoiid  operation  the  maximimi 
average  width  of  stope  was  30  inches. 

The  two  methods  were,  resj)ectively.  as  follows: 

\\  hen  resuing  was  applied,  the  vein  was  first  stripped 
on  the  footwall  (whicli,  in  this  case,  was  the  more  eco- 
nomical to  handle)  to  a  width  of  30  in.  This  waste  rock 
was  used  largely  as  filling,  although  a  certain  percentage 
was  necessarily  sent  to  the  surface.  When  some  3.6o<t 
sq.  ft.  of  (|uartz  had  been  stripped,  this  was  broken  down 
as  a  clean  product,  so  that  no  sorting  was  required. 

In  the  second  case,  the  quartz  and  adjoining  rock  were 
broken  together,  and  the  fineness  to  which  this  product 
was  reduced  allowed  of  sorting  out  only  5  per  cetit  of  the 
barren  rock. 

The  following  figures  are  compiled  from  those  experi- 


^\ 


;!:■ 


\:\-2 


Jill:  liCONOMICS  Ol-  MIXING 


merits,  and  allhuUKli  lli«^  ijcilhI  ovii  whicli  llu-  ivrnk  was 
fxtciulcd  was  of  necessity  linnltil,  and  is  iHi»il)l>  nnt  an 
absolute  guide  as  to  what  the  work  should  cost  umkr 
simi'ar  conditions  over  lart;e  areas,  they  indicate  the  most 
pn.tital.lc  method  of  handling  ore  occurring  under  thcsf 
conditions. 

r.xaiiiple  A  shows  a  loss  of  $23.76  on  the  operation, 
while  in  r.,  where  resuing  is  resorted  to,  a  profit  of 
Si.4(iw.4n  is  made.  In  ixith  cases  6  in.  of  quartz  was 
dealt  with. 

In  the  second  comparison.  C  and  D.  a  12-in.  viin  \al- 
lui!  ;it  ^n  dwt.  was  worked,  and  while  tlu-  discrepancy  is 
not  so  m.irked.  it  is  shown  that  mider  these  conditions 
there  is  Mill  a  consideraliU-  martjin  in  favor  of  resnini^. 
'1  lu'  last  example,  E.  is  pnrelv  theorelical,  a.i  far  as  the 
iHTcentage  sorted  is  concerned,  and  is  c^iven  m  further 
support  of  the  contention  held. 

CoDitirisons  Between  Strif-fhii:  Xarrn:^'  Reefs  and  Sl.'l^iiiS 
Them  '.eilh   U\iite 

Fxample  .'\.— Width  of  reef.  6  in.;  v.iluo.  50  dwt.  Stopinir 
wultli.  .10  in  ;  v.iliie.  10  dwt.  One  ton  contain.s  20  per  cent  of  reef 
and  80' per  cent  of  waste:  5  per  cent  i>  sorted,  5  per  cent  "t  So 
per  cent  is  4,  leavina;  76  per  cent  of  tlie  wa-te.  So  that  oO  per 
cent  HOI'S  to  the  mill  witli  a  value  of  10.41  <lvvt.  per  ton.  Ri'cov- 
cry  e(|Uals  7,  per  cent  of  10,41  dwt.;  that  i<.  7^  dwt.  at  io./t 
which  is  $7,49.  One  hundred  tons  at  $7.49  is  $749-  On  a  ba-i-  of 
100  tons  nulled  it  is  nice'-^ary  to  cliargc : 
To  mining       104  tons  at 


tr;ininunK  104 
hni-inis4  104 
millnijj       100 

redemption 

charses,  general, 
pumping 


\.<M ?374  40 

0^6 •■•  .3/44 

0.18 18  72 

1.44 144  03 

0.72 7|0r, 

o.()6 "i"  00 

0,60 <«  00 


Total  exiKii-o-  for   kk)  tons ^""a  «^ 

Value  of  gold  rec<jvired.   100  tons 748.80 

Loss    5523. ?(' 

Example  B.— Stripping  ,',0  in.  of  waste  and  mining  6  in.  of 
clean  reef.  Width  of  reef,  6  in.;  value,  50  dwt  p.r  ton  Rec(>v'- 
cry.  75  per  cent  of  .so  dwt. ;  that  is.  .37  5  dwt.  at  $o.<A  or  $36.  On 
a  bu2l2  ul  100  lutt^  at  -i\y   ■;■.- ■ ■   --   *^- 


h'usi-ixc  IX  rxnr.RGROUXi^  wok'K    v'.-'> 


To  iimiiHK  S""'  ton-  of  wa'itc.  at  $J  40 $'■ 

■■  nulliiiK  UK)  tons  (jf  rtcf.  at  $,!(« 

"  llalnlllIl^;   1 10  loll",  of  wa^ti,  at  $048 

"  traniiniiij;  100  tons  of  rtif,  at  $0  V) 

"  hoi>titiK  icx)  tons  of  waste,  at  $18 

■■  hoisting  iix)  tons  of  ri'cf.  at  $iS 

■■  iiiillniK   100  tons  of  rcof,  at  $1  <)j 

'■  rcdciniilioti,   at   $o.(X) 

"  cliarKi-.   at  $0  Kj 

"  pninpuig.  at  $0  7J 

Total  expenses  for  too  tons 

Vahif  of  n"'d  recovered.   100  tons 


$I.JOO 

00 

?(o 

(Xj 

5<i 

So 

.16 

00 

iK 

or. 

i« 

00 

||)-' 

00 

<X) 

00 

Xl 

O.T 

/  - 

'lO 

$J.l.>K  80 

.^.fxxi 

no 

I'rolit   by   stripping Ji.tri^O 

Fxample  C— Width  of  reef.  12  in.;  value,  .^o  dwt  per  ton. 
StopniK  reef  and  waste  together  .Vverane  valne  of  .^o  ni  .  IJ 
dwt.;  40  p'T  cent  of  this  is  reef;  60  per  cent  is  waste;  5  per  cent 
is  sortdl.  equal  to  ,?  per  cent  of  tlie  waste;  leaving  Q7  1«t  i^^"*  t" 
mill,  aveninmg  124  dwt  ;  75  per  cent  recovery  ..f  1J4  ilut  is  ii.\ 
Value  of  gold   in   100  tons   {•).>,  <Kvt    at  J«S'M'    is 


Tons 


Tcsl 


Intnl. 


dwt.  per  ton 

Mining    '103  at  $,vf)0 $J7o  «o 

•     o.?6 ^7  <^ 

0,18 ■«  54 

1.44 14400 

o.Oo 60.00 

072 7200 

066 66.00 

tons $7'>8  .1- 

«.).'  So 


I  rannning    J03 

Hoisting    iOi 

Milling    100 

Pumping    'oo 

Redemption    lo<> 

Charges    i«> 

Tot.il  expenses  f  ir 
Value  of  gold  recovers 


Profit 


$IJ4 


Example  D.— Stripping  12-in  reef.    V.iUic.  30  dwt.;  75  V^'^  "'"' 
coverv.  is  22.5  dwt.,  or  $2i.0o     Value  of  t'ol'   in   too  tons  at 


recovery,  is  22.5 
$2I.tK)  Is  $2,100. 


Ti.ns. 
250  at 
100    " 

100    " 

2.1     ■• 
100     " 


Mining    waste 

Mining   reef 

1  landling    waste 

llaiulling   reef 

1  loisting    waste 

Hoisting    reef 

Milling    100 

Pumping    

Redemption    

Charges    

Total  expenses  for  100  tons $1,461   18 

Value  of  gold  recovered ■     -■"'"■°° 

Profit    ^-^^ 


Cost.  ^K.'T'"^'- 

$2.40 $fi0O  fK) 

360  liO 

11  .  04 

.V)  ■  00 

'. 414 

18.00 

192.00 

72.00 

96.00 

72.00 


.V'lO 

0.4S. 
o  ^6 . 
o.iS. 
o  18. 
1.02. 
0.72. 
0.96. 
0.72. 


134         run  luoxoMics  on  mi\i.\g 

l".\.iini)lc  1^  -Widtli  '4  rill,  ij  in  ,  v.jIiu',  .fo  dut  per  Inn 
Stuping  riif  ,111(1  vvasli-  tdKitlur.  .io  in.  vvuli',  and  tlicn  sorlini;  JO 
pir  cent  of  till'  ri)ck  niiiud  Value  of  rock  before  sorting,  u 
dwt  ;  after  sorting.  15  dwt. ;  75  per  cent  extractinn  )iive>  1 1 -'.■, 
dwt.  recovery;  100  ton>  at  11  J5  ilwt    at  $09()  etpiaU  $l,oSo 

Expenses. 

Mining   Ij.i  tons  at  $,!  t« $-150  "" 

I  riniiiniiiK   Ij.s  tons  .it  $0  .}6 45  O" 

lloiMin^;   IJ5  "tons  at  $0  iH 2J  51' 

.SMrliiiK'  -'.S  ions  at  $0(/) 24  (Xi 

Milling'  100  tons  at  $1  44 '  U  "<' 

Piiiiipini;   100  tons  at  $of>o (lO.OO 

Redciiiplion   100  tons  at  $0  72 7.'  00 

Char^jcs    [(X)  tons  at  $o(i<> <><)"<> 

lilted  cxi)cii-c-  for  KX)  tons $883-50 

Value   ol    Kold   recovered I.oSo.OO 

Protii    IkX'  50 

Thcsf  fioiircs  ret1i-ct  tin-  iiniMirtaiicc  of  cari'tttlly  wciph- 
itti,'  tlu'  nn'rits  of  the  two  niethods  of  stopiiit;  wlicii  ikal- 
iiij;  with  narrow  veins.  I'.  I  .  RoiUiRTS. 

lUihivsayo,  Khodebia,  Oct.  27,   1903. 


GOLD   MINING   IN    RHODESIA. 

By   F.  C.  koiiKKi.i. 

(Drcci.:'jer    lo.    19113) 

Introductory. — i->in^  lietwcm  latitmles  16"  and  23" 
south,  and  lon^ntudts  25"  and  30  i'a>t,  Rhodesia,  winch, 
a  few  years  ajj;i),  was  almost  wholly  inhabited  by 
native  tribes,  can  now  luiisl  of  a  while  j)opulation  of  about 
ten  thousand.  I'he  country  derives  its  name  from  the 
jjreat  founder.  Cecil  John  Rhodes.  In  its  phy.-.ical  aspects 
Rhodesia  ditTers  from  most  of  the  Western  mining  Stales 
of  America,  in  that  few  really  high  mountain  ranges 
traverse  the  country.  The  mining  districts  emiirace  nu- 
merous small  hills  which  gradually  fade  away  mto  large 
areas  of,  first,  undulating  and  then  almost  flat,  plains. 
In  the  granite  belts  an  independent  tyjje  of  scenery  is  pre- 
sented, consisting  of  wide,  slightly  undulating  plains,  dot- 
ted with  countless  small  conical  hills  (kopjes)  varying  in 
height  from  50  to  ^(X)  feet. 

In  but  one  instance  in  the  whole  of  Rhodesia  has  it 
been  found  advantageous  to  attack  the  ore-bodies  and 
veins  through  adits;  practically  every  mine  in  the  country 
has  been  opened  up  through  shafts.  The  gold  mining  in- 
dustry at  the  present  time  is  the  only  industrial  source 
of  revenue,  and  presents  certain  aspects  difficult  to  com- 
pare with  those  existing  in  other  countries.  The  vicissi- 
tudes to  which  Rhodesia  has  been  subjected  have  been 
numerous,  unique  and  costly ;  they  have  militated  against 
the  energy  and  enterprise  which  have  been  thrown  into 
the  country,  the  progress  of  which  has  been  sadly  re- 
tarded in  consequence. 

The  internal  system  of  railways,  whicli  is  now  being 
extended  over  the  country,  will  bring  within  easy  access 
of  the  centers,  Rulawavo  in  Matabeleland  and   Salisbury 


1= 


136 


lllL  LlO.\UMIlS  Ul-  MI.MMj 


in  Mashonaland,  every  mininf;  (li.-lria  nf  importance,  and 
thereby  rem.  ive  the  hindrance  dne  to  iiruhil)iiive  prices 
and  scarcity  of  wa^on  transport.  An  independent  hne. 
200  miles  inny,  winch  is  practically  the  tirst  lap  in  the 
Cape  to  Cairo  railway,  from  Unlaw ayo  via  \  iciorii  1-alls, 
will  tap  the  Wankie  coal-tield  hy  tiie  end  oi  November. 
The  Wankie  cual  will  then  be  available  for  use  in  jjracti- 
cally  every  minint^  dist.ict  of  l\hode.->ia. 

c't-o/oi^v.— (ieolo.^ically.  tho-e  parts  of  Rhodesia  which 
have  been  at  all  explore'  present  much  the  same  features 
as  other  ^\\v,\nv.  countries.  In  two  instances,  however, 
we  are  favored  with  s;eoU.!,Mcal  problems  which  promise 
to  be  of  especia]  interest  and  imp<irtance,  and  in  both  in- 
stances the  commercial  aspect  of  the  in<iuiry  will  stinuilate 
scientific  investigation.  1  refer  to  an  anrifemi-s  diorite 
in  the  one  ciise.  and  an  auriferous  hornblemle  ixirphyrite  in 
the  other. 

X(,  ■.e(ilo_L;ical  survey  has  yet  been  made  in  Rhodesia, 
hence  onlv  a  generalized  description  is  possible.  I'y  far 
the  .greater  portion  of  the  country  consists  of  t^ranite 
rocks,  in  wide  belts,  liavint,'  a  strike  somewhat  west  of 
north  and  east  of  south.  The  .^old  bells  embrace  ilie  areas 
characterized  by  slates  and  >chists,  varyins;-  in  extent  from 
a  fevv  hundred  yards  wide  by  half  a  dozen  miles  in  len.i^th, 
t..  15  miles  wide  by  i,o  miles  in  len.i;th.  These  metamor- 
phic  rocks  are  traversed  hy  nr.nierous  dikes,  consisting 
nf  tlu'  nianv  v.irieties  of  di.  ,nte.  In  tl.e  valle_\s,  or  small 
^niK  hes,  oi  the  lull  country,  the  dlnvinin  is  of  very  limited 
extent.  su,L;,s;esting  a  lack  of  tho-e  e-treine  climatic  con- 
ditions necessary  to  produce  rapid  ero>ion. 

The  i[uartz  veins  include  ^e\eral  distinct  types:  the  most 
common  are  the  iiiterlaminated  veiii>.  which  are  found 
abundantlv  in  the  fcjliated  rork~.  tlmn-h  nuinenius  segre- 
gated veins  also  exist.  Tb.e  ([uart.-^  "ccnr<  generally  in 
leniicul.ar  bodies,  sometimes  di>iiiictl\  isolated,  but  more 
n-nalK    'n   naralM   series,   exhibiting   i.;reat    v.ariations    in 


m 


GOLD  MIMXG  IX  RIIODP.SI.l 


137 


width  and  vertical  persistence.     On  tlic  wlifilc.  the  veins 
are  narrow  and  tlieir  lateral  extent  is  ratlier  limited. 

At  the  Ayrshire  mine  in  Mashonaland  an  auriferous 
diorite  is  under  exploitation,  but  as  yet  little  is  known  of 
the  genesis  of  this  most  intercstinir  occurrence.  .\  large 
amount  of  \v>irk  has  been  accomplished  laterally,  and  the 
vertical  depth  reached  is  over  600  ft.  The  irregularity 
of  the  gold  contents  of  the  dike  and  various  .ither  char- 
acteristics would  seem  to  support  the  lateral  secretion 
theory." 

The  writer  has  lately  discovered   an  auriferous  horn- 
blende porphyrite.     This  rock  is  most  interesting  petro 
graphically,  and  is  (luite  uncommon  in  this  country.     It 
consists,  as  seen  under  the  micro.'icope,  "of  large  crystals 
of    feldspar    (chiefly    plagioelase ),    jrassibly    with    some 
orthoclase    and    smaller    calcareous    pseudomorphs    after 
hornblende,   retaining    good    crystal     outline,     imbedded 
in    a   fine-graineil    feklspathic    ground-mass.       The    feld- 
spars  are   somewhat    crushed    and    the   alteration   of   the 
hornblende  iniplies  a  certain   amount   of  water  action." 
This  body  has  recently   undergone  exploitation,  and  ap- 
pears to  predominate  in  the  moulding  of  a  small  range  of 
hills  rising   3CX)   ft.   above   the   surrounding  country.      In 
close    proximity    to    tiie    porpb\riie    are    the    crystalline 
schists.      .\    superficial    examination    shows    considerable 
variation  in    width,   the   maximum   being  about    150   ft., 
while  the  lateral  extent  will  probably  reach    i.coo  ft.  <ir 
more.     F.nough  work  has  not  been  done  to  decipher  the 
geological  structure,  nor  can  an   intelligent   idea,  as  yet, 
be  formed  with  regard  to  the  origin  of  the  gold  content. 
Samples  taken  over  the  varions  widths  exposed  give  from 
2  to  T?  dwt.  per  ton.  and  although  these  re.snlts  are  not 


' 'I  lie  KOld-br.irinj;  (iinrite  of  tlie  .Ayrsliirc  iiiiiK-  wa^  di^rus^ed 
in  ilii^  JiUKNAi-.  iiiulir  datf  of  July  II.  IQO,^.  p,  44.  ''.v  Mr-  ^-  ^■ 
I'.errinRton.  and.  on  Ortobcr  3,  IQ03.  by  Mr.  J,  F..  Spiirr. 


V.M 


THE  htOXUMlCS  Of  MIXING 


representative,    they    indicate    an  occurrence    of    unique 
character. 

Ancient   IVorktngs. — An   interesting    feature   of    Rho- 
desia is  the  fact  that  every  auriferous  district  has  been 
larj^ely  worked  by  an  extinct  race,  popularly  referred  to 
as  the    ancients,'  and  although  some  relics  left  by  these 
people  have  been  found  in  the  bottom  of  old  stopes  lately 
opened,  as  well  as  among  the  numerous  ruins  existing  in 
the   country,   no   satisfactory    explanation    has   been    ad- 
vanced touching  their  identity.     The  amount  of  work  ac- 
complished and  the  ([uantity  of  gold,  copper  and  iron  ex- 
tracted bv  th:  n    nnist  have  been  enormous.     While  the 
remains  of  these  workings  have  largely  aided  the  pros- 
pector during  the  modern  reopening  of  the  country,  when 
conditions  were  more  or  less  abnormal,  there  is  little  doubt 
that  their  eflfect  has  tended  to  hinder  the  introduction  of 
a  thorough   system  of  prospecting,  and  has   in  a  great 
measure  deflected  attention  from  the  large  areas  contain- 
ing virgin  reefs.     Several  calculations  of  the  amount  of 
gold  extracted  by  these  'ancients'  have  been  made ;  these 
estimates  are  hypothetic  and  no  accuracy  is  claimed  for 
them,  but  the  latest  reach  $.^00,000,000.     It  has  been  the 
custom   to  judge   the   value  of   a    mining  proposition   in 
Rhodesia  by  the  extent  of  the  'oM  workings,"  without  re- 
gard  to   geological    considerations ;    hence    many    disap- 
pointments. 

The  knowledge  displayed  by  the  'ancients'  in  determin- 
ing the  value  of  tiie  ore  was  indeed  marvelous.  It  is  not 
to  be  assumed  that  they  realized  width  of  vein  as  an  im- 
portant factor,  but  it  would  appear  to  have  been  a  suffi- 
cient encouragement  to  them  that  a  vein  contained,  say. 
a  minimum  value  of  10  dwt.  per  ton.  This  work  no  doubt 
extended  over  a  very  long  period,  tor  wherever  the  rock 
wa'i  not  readilv  NoftetuHJ  bv  weathering,  they  built  fires 
against  the  stope-breasts  and  then  threw  water  upon  the 
heated  rock  so  as  to  induce  fracture.     In  .some  instances. 


GOLD  MIXIXG  IX  RHODESIA 


mo 


where  it  is  evident  from  tlie  contours  that  water  was  not 
encountered,  they  worked  to  a  depth  of  no  less  than  250 
ft.  on  the  dip. 

Financial  Considerations. — The  British  Soutli  .-\irica 
Company  formerly  had  tlie  ri^ht  to  demand  up  to  50  per 
cent  of  the  vendor's  interests,  but  this  right  was  seldom 
exercised  to  its  full  extent :  it  has  now  lieen  reduced  to 
30  per  cent,  and  is  pfenerally  satisfied  by  the  transfer  of 
the  necessary  number  of  shares  in  the  new  company. 

The  modus  operandi  obtaining;  in  Rhodesia,  and  adopted 
by  practically  every  financial  house  having  an  interest 
here,  includes  many  features  which,  to  those  unac(|uainted 
with  the  local  conditions  and  the  market  considerations, 
would  appear  to  cast  an  unnecessary  burden  of  heavy 
cai)italization  up<.n  the  mines;  but  there  are  explanatory 
circumstances.  A  mining  claim  in  Rhodesia  embraces 
an  area  150  ft.  along  the  strike  of  the  outcrop  or  old 
working,  by  600  ft. ;  hence  ten  claims  constitute  a  block 
1,500  ft.  by  600  ft.,  which  is  equal  to  the  mining  claim  as 
defined  by  the  United  States  Mineral  Code.  The  other 
regulations  contained  in  the  Mineral  Ordinan  '■  are  really 
only  modifications  of  the  United  States  laws.  What  is 
termed  the  'parent  company'  in  Rhodesia  is  a  limited 
liability  company,  with  a  capital  of  from  $150,000  to 
$5,000,000,  formed  for  the  purpose  of  acquiring  mines, 
lands,  farms,  etc.,  the  latter  being  necessary  m  order  to 
secure  timber.  .\t  the  present  time  the  timber  consti- 
tutes the  only  fuel  of  the  country  :  the  mining  company 
pays  a  royalty  of  $1.20  per  cord  to  the  farm-owner.  The 
number  of  claims  controlled  by  these  parent  companies 
varies  from  100,  in  small  concerns,  to  as  many  as  5,000 
in  the  larger  companies.  The  object  of  the  parent  com- 
pany is  to  carry  out  a  system  of  proLpecting  and  develop- 
ment work,  with  a  view  to  placing  independent  prop- 
erties upon  the  market.  It  is  obvious  that,  in  a  country 
where  development  expenses  are  very  high,  there  must 


^1 


m 


I  III 


77//:   IICUXOMICS  OF  MlXlXu 


he  a  limit  to  tlicse  oi)oratinns  :  t(ir  if  an  attempt  is  made 
bv  ilie  ]iarcm  ciunpany  to  (kveiup  trum  l8  montlis  to 
tun  \ear.^'  supph  cf  ' ire.  upon  a  miinher  of  claims,  it 
lieennies  impossilde  t'>  tiiiaiice  the  work;  hence  it  is  clear 
iliat  the  s;iil(l-niinin.--  ciiiiiiiany  mu.st  asMune  hiLT  resjx.n- 
-ihililies,  and  therein  lies  the  key  to  many  failures.  The 
prohlenis  with  which  the  parent  company  is  faced  are  as 
follows : 

la)  Capital  and  shares  involved  in  purchase  of  prop- 
erty. 

(h)  Capital  involved  in  i)rospecting  and  development 
'vork. 

(c)  Capital  involved  i;i  installation  of  temporary  sur- 
face eciuijjnienl. 

(d)  Intirvst  accunntlatinj;  iipon  capital  invested. 
The  chief  ci  niMilcrations  of  the   L^old-minint;  company 

are  as  follows  ; 

(i)  Capita!  involved  in  purchase  of  property  from  tl'.e 
parent  comnany. 

(.2)   Capit;d  involved  in  developnient  work. 

13)  Ca])ilal  or  shares  involved  in  conmiutatioii  of 
Chartered  Company's  ri.trhts. 

(4)   Capital  involved  in  purchase  and  erection  of  plant. 

(  3)  Capital  or  shares  involved  in  making  provision  for 
possible  extension  of  ])lant. 

Assiniting  a  width  of  vein  of  30  in.,  with  tlic  ore-bodies 
not  too  scattered,  it  becomes  necessary  to  make  jirovision 
for  an  ex])enditure  of  no  less  than  $360,000.  in  order  to 
bring  a.  pro])erty  to  a  milling  stage  and  e()ui])  it  with  a 
jo-stamp  mill.  c_\;inide  jjlant.  etc.  This  should,  under 
ordinary  circuni>lances,  gi\e  18  to  20  months'  nni  of 
pay-ore.  As  a  matter  of  fact,  no  mine  in  this  countr\- 
should  cotiimence  the  reductitju  of  ore  with  less  than 
three  year^'  ore  in  .such  a  state  of  exposure  as  to  be  rea- 
sonably CMunteil  upon  to  return  a  margin  o'er  and  above 
the  estini;iUil   working  ex])enses  :  for  it  i-  next  to  impos- 


'-^^^ 


GOLD  M/XIXG  IX  RHUDLSI.l 


II! 


I 


>ii)lc  to  kiop  the  (K'vcl'i]imt.iU  wiirk  as  far  ahead  of  th'.' 
reduction  plant  as  the  constantly  tliictuatinj;  and  inetli- 
cient  lahor-sujiply  demands. 

.Iss,iy  I'ltiiis. — At  nK'sl  <>i  those  tnines,  which  have 
reached  an  advanced  staij^c  of  development,  surface  and 
assay  plans,  as  well  a-  section  and  stopin^^  j^lans,  are  kept ; 
while  the  data  inih.  idied  in  the  plans  \ar_\  somewhat  for 
different  mine>,  the  fundamental  principles  are  adliered 
to.  The  development  assays  as  well  as  the  stope-assays 
are  taken  at  intervals  of  5  ft.,  and  i)lotte(l  weekly.  The 
])enn\  weiglns  are  shown  in  red  and  the  width  in  inches 
in  l)lack.  .Ml  sam])les  are  taken  over  the  actual  reef- 
wid.th,  which  fi.i,nires  a'  adjusted  to  an  assumed  stoping- 
width  in  the  assa\-ho(jk. 

I;-,  the  opinion  of  the  writer,  the  methods  (often  used 
when  the  widih  of  reef  is  undiT  an  assimied  stopiiiLj- 
widtli)  of  sam])hnu;  over  the  stoi)in.L;-w  idtli,  emhracing 
both  reef  and  country  matter,  are  lialile  to  ])roduce  in- 
accurate results.  It  api)ears  clear  that  where  the  char- 
acter, hardness  of  the  rock,  etc.,  show  a  marked  differ- 
ence, it  is  almost  impossible  to  obtain  such  a  correct  ])ro- 
portion  of  each  section  as  to  insure  reliable  results.  These 
remarks  are  ])articularly  a])i)lic;ible  to  this  retrion,  where 
so  manv  small  but  rich  veins  occur,  wiiich,  in  many  cases, 
have  lent  themselves  more  readily  t<i  oxidation  than  the 
enclosint,'  rock.  Sectional  samijlinir  is  lar.q-ely  practiced, 
not  oiiK  in  develoiPinent  work,  but  at  .all  stope-breasts.  in 
order  to  avoid  the  handlint,"-  of  ore  which  will  not  leave  a 
marijin  over  miniuL;'  and  millintr  expenses.  In  this  coun- 
tr\  the  imit  of  \alue  is  the  tro\-  penny wt'ii;ht.  e(iual  to 
about  4  shillin,!;s,  or  one  dollar.  In  order  that  immediate 
apiiroximations  mav  he  made  of  the  stope-breasts.  daily 
samples  are  taken  and  panned;  these  furnish,  after  one 
h;i^  become  familiar  with  the  character  of  the  i;i)ld.  etc., 
satisfactorv  results;  but  the  results  plottcl  always  refer  to 
fire-assavs. 


11: 


77//:   i:COXOMlCS  ()!■   MJXIXG 


For  tlie  purpose  of  avnidiiii;  inaccuracies,  the  iiu;:v..iual 
stojjcs  arc  plotted  to  lar)j;e  scale  upon  separate  blocks, 
and  these  are  used  for  calculatint,'  tonnages.  The  usual 
scale  for  imderijround  jjeneral  plans,  etc.,  varies  from 
I  in.  =  JO  ft.  to  I  in.  =  fro  ft.,  depending;  upon  the  extent 
of  the  property 

DcTclopi)\ci>t  Work. — Generally  speakinj^,  the  quartz 
veins  in  this  country  may  he  r.aid  to  he  narrow.  The 
lateral  continuity  varies  greatly,  and  rarely  exceeds  the 
full  lenf,nh  of  a  block  (1.500  ft.)  ;  the  prade  (when  the 
widths  are  adjusted  to  a  common  basis  and  suitable  areas 
are  used  in  calculations)  ranges  between  8  dwt.  and  22 
dwt.  per  ton. 

At  the  \\'an<lerer  mine,  where  a  dry-crushing  plant  of 
about  3(X3-ton  capacity  has  recently  been  erected,  the 
average  is  under  5  dwt.  per  ton  ;  in  this  instance  no  un- 
derground work  is  necessary,  the  ore  being  quarried.  In 
common  with  other  countries  where  tb.e  industry  is  onl\' 
emerging  from  infancx.  Rhodesian  ventures  have  suf- 
fered by  the  erection  of  reduction  plants  before  sufficient 
work  has  been  accomi)lished  underground.  The  period 
consumed  in  reacliing  the  milling  stage  varies,  of  course, 
with  the  width  and  lateral  continuity  of  the  reef  in  each 
case,  but  it  may  be  said  that  in  Rhodesia  it  requires  from 
three  to  four  \ears  from  the  date  that  work  is  initiated. 

The  comparative  cost  of  unskilled  labor  would  suggest. 
at  first  sight,  that  the  costs  of  develcjpment  work  should 
be  very  low  ;  this  is  not  the  case,  however,  for  althf)Ugh 
the  native  wage  seems  low,  when  the  other  expenses  in- 
cident to  their  emjiloyment  are  considered,  it  is  foiii:  1 
that  they  account  for  about  30  per  cent  of  the  total  cost. 
This  is  not  clearh'  reflected  in  the  figures  following, 
as  in  this  case  the  contract  system  is  largely  employed. 
The  costs  of  stores,  nnning  material,  etc.,  together  with 
many  other  incidental  charges  associated  with  mining  in 
this  comitrv,  as  well  as  administrative  expenses,  are  very 


GOLD  MIXIXC  IX  RHODESIA 


143 


144         Tin-  r.cnxoMics  op  Mixiyc 

hi,.],.  Tt  i>.  tl.Tof.,r.  .-rnti:,l  that  lircrc  footn-c^  be  ob- 
tamc.l  M,  Uial  a  vcax.nablc  ,li.lril.utiMn  may  W  uv.uU-  of 
ih.  Tnnsiant^.-  An  analvsi^  nf  tb.  owt.  nf  clcv.lnpincnt 
lip. .11  a  Rbndcsian  mine  i-^  uu^n  burrwillr. 

Mine  D.':r!»r'ncnt.  ...,,,„,. 

Milk-.l,  :l>;i- of 

Tntril   Cost  t-i"!"-  *"'■''  '^"''• 

Salaries    $l.W)2.28  444  -'47 

Whue  wages -'.<;''  ^^  .','  ^  ,'    o 

Contractors    21.S8...-4  57..0  .^-  ".^ 

Xal.vc   wages ,?.'7".40  «-34  4  15 

Xat.vc    food ><>^«'  :-^  -^ 

Maititenance    75')?°  |~  \\\ 

Workshop-     '."40.80  2.,4  '   -■^.^, 

Xanve    ho-pital -'87.14  0.74  o- 

N-at.ve  lal.or   supply 74-40  O.lS  O-^o 

Putnpmu    4.439.52  1   .06  O-.o 

Conipoun.l    ^"4.08  -.20  I.-, 

f„n,.r.~-or.an,lr..ck-ar,!l~,  I0..VK*.74  43-08  -4.00 

Win.lnig    '."o--'^'  i-':^  -i^ 

rmlcrgnninil    tramming....  -'.7,U.S0  /  ■  ^\  ■■<   ^ 

.\ssav    acoomit 0'>0.<J4  >  ' 

Surviving  and  .^amplmg....  ;i-'-/0  -N  1.04 

Rock-drilN  and  >liarpcning.  5.579.28  I4.0<'  _»_^ 

Xyl;il    $08,300.12  i7'ji  30  99.45^ 

The  fontat^t'  cxcciitcil  ihirinc;  the  pcrin.l  covered  by  this 
expenditure  amounted  to  2.O77.  repre^'iitin-  a  cost  of 
$26.50  per  foot. 

With  haiKl  labor,  drivin.ir  in  fairly  hard  nrmund,  40  ft. 
per  month  is  considered  -o,,d  uork.  while  with  machine- 
drills  So  ft.  is  an  avera-e.  On  the  Rand,  anytliit^tj:  up  to 
200  ft.  per  month  is  made  in  driving:  in  shafl-sinkinti 
also  this  rate  is  attained.  TpMi  one  property  with  which 
the  writer  was  coniiecied  in  t!ie  Tran-va.il  about^  six  years 
asro.  no  less  than  2r«  ft.  of  sinkin-'  wa.^  accomphshed^dur- 
iniLjone  month,  i.  .-..  from  the  1.027-ft.  level  to  the  1,287-ft. 

level. 

The  smaller  amount  of  work  accomplished  m  this  coun- 
try is  due  lar-clv  i-.  tlu  inferior  eipiipment.  both  nnder- 
t:roun<l  atid  on  the  surface,  for  handling  large  (luamities 
of  hroketi  rock. 


GOLD  .MIMXU  l.\  klluDLSlA 


IJ.") 


U'orkini^  lixl'L'iiscs. —  I  believe  that,  in  Rhodesia,  the 
recjuireiiieiils  of  ;iii  (.ir^iueer,  in  rtspeet  to  the  nnnilier  oi 
l)r')[)erlies  he  is  txpeeled  to  inana_UL.  are  mnisnal.  it  is 
tlierefnre  necessary  that  tletailed  ami  complete  records  he 
kept.  The  comparatively  hi,L;h  ami  con.>ta.Mly  lUictuaiint; 
jirices  of  mininj^  materials  and  ,sup])lie>  make  it  essential 
that  constaiU  (imitations  of  these  articles  he  ijhtained  and 
tiled  for  daily  reference,  with  the  hope  of  et'ectinj,'  econ- 
onu  in  operating;  exjienses,  as  well  as  tor  the  pur|)ose  of 
i^e'tinj,'  i-iut  estimate-  which  can  he  treatetl  with  con- 
lideiice. 

'Ihis  also  snt^.tjests  the  iinpe)rlance  of  correctly  mea.-nr- 
ini,'  the  lonn;i!j;es  handled.  The  methods  in  vogue  are  not 
conducive  to  accurate  results;  it  is  customary  to  count 
the  cars  of  certain  calculated  capacity  as  they  are  deliv- 
ered to  the  mill  or  crusher-station:  this,  less  the  mimlier 
of  cars  discarded  as  waste  (in  all  cases  estimatin-,'  _'o  cu. 
ft.  of  broken  rock  =  i  ton),  is  taken  as  the  tonnage 
crushed.  It  is  ai)parent  that  greater  care  is  required  he- 
fore  a  comprehensive  comparison  can  he  made  of  theoreti- 
cal and  actual  results.  The  almve  methods  would  be  all 
riL;ht,  if,  after  determining  the  lumiher  of  cubic  feet  to  the 
ton  in  individual  cases,  each  car  delivered  to  the  mill  was 
of  exactlv  the  same  capacity  and  tilled  to  the  same  point, 
and  moisture  samples  taken.  This,  however,  is  not  prac- 
ticable. The  stojie  measurements,  in  some  cases,  are  used 
as  a  check,  but  it  is  hardlv  -leccssary  to  state  that  only  ;m 
approximation  is  arrivt-d  at.  This  matter  is  of  great  im- 
portance, both  as  regards  relative  working  costs  as  well  as 
relative  stamp-duty :  therefore,  it  is  imperative  that  a 
uniform  svstem  be  adopted,  at  least  in  cases  wiierc  the 
tl;.;nres  are  to  be  hied  for  reconl  ;ind  general  information. 

Scales  should  be  used  for  automatically  weighing  and 
registering  the  cars  delivered.  Then,  if  each  car  is  tared 
and  periodic  moisture-samples  are  taken  of  the  ore,  as 
delivered,  a  correct  idea  of  the  tonnage  will  be  obtained. 


14tl 


TIIL  LCuXOMIlS  UI-   MIXIMI 


}!illi„^.—l'hv  imnHhiction  of  heavy  stamps  witli  tl^c 
,,l,jcct  ni  securing  a  lar-c  >taiiii.-cluty  >.cciiis  tn  liavc 
rtaclicd  its  i)ractKal  limits,  thai  is,  at  1,45"  "'•  '"  -^""'^"^ 
llu'  mill  is  used  mnrc  as  a  crushing'  machine  than  with  the 
idea  (if  effci-liiiK  iKifcct  amal^'amaiinii.  and  so  Inn^  as  the 
ores  lend  themselves  readily  m  sul.MMpuiit  treatment  hv 
cyanide  in  the  state  of  tiiieiiess  pnuluced  hy  the  use  of  a 
low  dischartje  and  a  coarse  screen  (20  In  25-incsh),  a  hi-h 
duty  is  well  enough.  The  prevaihntr  meth..d  of  operating' 
a  stamp-mill,  in  so  far  as  the  mechanical  end  of  the  work 
is  concerned,  is  as  f.illows:  Order  of  <lrop,  1-3-5-J-4: 
height  of  droj),  8  in.  ;  number  of  drops  per  mmute.  </). 

As  a  further  means  of  increasing  the  stamp-duty, 
double  crushing  with  rock-breakers  is  resorted  t..;  the 
product  being  fed  to  the  mill  is  cruslied  in  the  first  case 
to  about  a  2.5-in  ring  and  then  passed  to  No.  2  crusher, 
where  it  is  reduced  to  'ibout  a  i-in.  ring.  This  method 
might  be  economically  extended  to  three  courses  of  crush- 
ing before  being  fed  to  the  battery. 

That  most  important  branch  oi  the  work,  namely,  sort- 
ing, is  almost  entirely  neglected  in  Khodesian  mines,  and 
1  daresay  many  tons  of  mck  are  sent  through  the  mill 
which  wi)uld  not  pay  for  the  wear  and  tear  that  they  are 
responsible  for.  Over  a  period  of  \2  months,  with  rock- 
breaking  capacity  sufficient  to  reduce  the  product  to  a 
2-in.  ring  before  entering  the  mill,  an  average  duty  of  5.5 
tons  per  stamp  I'er  24  hours  has  been  obtained  with  1,265- 
Ib.  stamps  (an  effective  weight  of  1,150  lb.),  using  a  2,5- 
in.  discharge,  20-mcsh  screen,  and  the  mill  running  .t  u6 
eight-inch  drops  per  minute. 

It  is  well  known  that  a  stamp-mill  under  ordinary  con- 
ditions does  a  large  amount  of  uimecessary  work,  that 
is  to  say,  the  product,  when  it  has  been  reduced  to  the 
fineness' indicated  by  the  screen,  is  not  immediately  dis- 
charged; hence  a  large  percentage  of  the  ore  is  reduced 
tcj  a  much  finer  state  of  division  than  there  is   U'r^m  a 


II 


GC 


MIXIM,   IX  RIlODlisIA 


147 


criisliinp  point  nf  view)  any  lucossity  for  In  recent 
years  a  fjreat  deal  of  attention  has  been  j;iven  to  iliis  sub- 
ject, with  tlic  result  that  the.e  are  now  on  the  market  sev- 
eral classes  of  subsidiary  crushers  for  use  ni  connecti<in 
with  the  stanip-inill.  As  an  illustration  of  the  product 
lurnished  from  a  stanip-hattcry,  it  may  be  stated  that  the 
writer  has  found,  wiien  usin^'  a  lo-niesh  screen,  that  87 
per  cent  of  the  discharged  product  will  pass  through  a 
^omesh  screen,  and  a  duty  per  stamp  (of  1,150  lb.)  of 
nearly  10  tons  is  obtained,  with  ordinarily  hard  (|uartz. 

C\dHu{ation. — Cjem  rally  speaking,  the  ores  of  Rho- 
desia present  few  dit'ticulties  in  metallurgical  treatment. 
In  most  cases  the  veins  produce  a  typical  free-milling  ore; 
at  the  mills  with  which  the  writer  is  connected  the  richest 
tailing  contains  T,  dwt.  per  ton.  from  an  ore  carrying  14 
dwt.  to  16  <Kvt.  per  ton.  It  the  mill  were  operated  with 
a  view  to  high  plate-extraction,  and  the  tonnage  sacrificed, 
the  grade  of  tailing  would  be  even  less.  The  sand,  if 
fresh.  lends  itself  readily  to  cyanide  treatment  at  a 
low  cost  per  ton.  while,  if  highly  oxidized,  as  is  often  the 
case  when  working  in  close  proximity  to  the  ancient 
workings,  a  small  additional  cost  is  incurred  in  neutral- 
izing. 

The  construction  of  the  double-treatment  cyanide  plant 
in  use  m  this  country  presents  no  new  features,  and  em- 
braces the  usual  appliances  necessary  with  zinc  precipita- 
tion. The  time  of  treatment  varies  with  difTerent  ores, 
according  to  the  character  of  the  gold.  In  one  instance 
the  gold  appears  to  be  coated  with  a  very  thin  film  of  iron 
sulphide  and  will  not  readily  amalgamate;  numerous 
coarse  particles  are  contained  in  the  tailing :  and  as  much 
as  10  to  12  davs  are  required  to  obtain  a  good  extraction, 
clthough  the  usual  treatment  covers  three  to  four  days 
only. 

A  great  variation  is  shown  in  the  fineness  of  the  gold 
produced  from  cyanide  slime :   this  is  largely  due  to  the 


148  77//:   l.(().\(>Mli--'S  Ol-   MIMX^i 

fluxes  iise.l.  .ir  llu'  prdn.nn.:is  x\ulh"d  "1  mMtmnu  :  it  is 
,pnto  pn,Ml)K.  .iM.l  n-t  rxpniMNc.  tn  pi.HhKX'  K- iM  a.  t.uc 

fiusol  hnnix,  Ju  m  .,5;  nuin;;:iiK^c  .liuxwU'.  -'o  n.  4"  •■  -""I- 
15  t,.  40  iKirts.  Till-  i>  a  moditkalion  nf  uh.it  ui  c;illr,l 
Crosse's  llux  at  |nlu,uK-.burK.  Tlu>  cxa.i  pP  .i.-rtmn  m 
bnrax,  niatiKaiu-r  .lioxi.lc  and  .and  i.>  1)>  M  dcU-nnnu'd 
liy  prai-tical  U'st>  ;  >.iiiuamu>  ihmr.par  lalmui  3  part.  I  is 

Tlic  addition  <>f  a  cyanide  plant  in  a  country  nt  •••■.- 
nulling;  nrc>  mav  lie  qucMinncd,  hut  il  i>  cnntcndci  lh..>  it 
the  j;rade  nf  tailing;  in  tiie  lirst  ca.e  will  pay  fnr  treal- 
nieiil.  11  i>  a  ilistinct  a<lvaiita-e  tn  cyanide  hecau-e  m  the 
increased  capacity  nf  the  mill. 

(„./,/  Nrlitnis'—M  tin  present  lime  all  declarati-ms  ni 
qnld  output  I'roni  the  several  pn.ducm-  inuie.  are  made 
in  hullioi). 

The  Minin-  Oniinance  in  I-IlmdeMa  demand^  that  affi- 
davits   shall    he    made    to    the    -.  a  eriimenl,    coverin-    the 
actual  amount   of  -.^Id    recovered   monthly,   hy    the   indi- 
vidual companies,  as  uell  a-  hx   private  enterprise.    Hence, 
after  each  clean-ui.  a  declar.ition  oi  tlii>  natcre  is  made, 
ddie    same    form    is    reipiested    hy    the   local    t  hamher   ol 
Mines,    the    latter    or-anizatioii    puhlishin-    the    return^. 
rnf,.rttmately  the  unit   used  i~   the  hullioi.  ounce,  sshich 
luav  varv  fnnn  700  to  930  fine.     It  is  (.•hvious,  theretore. 
that  to  make  an\  comparisons  without  heint,'  in  po.sessi.'U 
nf  the  hu'ures  i;i\in-  the  exact  fineness  of  the  .^old  is  a 
waste  of'time.     In  cvanide  -nld  the  discrepancies  are  even 
m-eater.  the  fineness  varvin-   irnm  J30  to  730.      1  he  elas- 
Ticitv  attendin.i;  this  method,  nf  deahn-  with  -■  Id  is  verv 
ureal,  and  cnuhl  he  utilized  tnr  intr))nses  of  much  graver 
rmport.mcc  than  appears  on  the   face  of  il.      It  would  he 
far  l.ett.r  to  olililirate  the  tn-v  measure  alto-ether,  suli- 
stitutin-  shi!!in-s   and  decimals  ,,f  shiUinij;..  rather  than 
to  continue  the  use  of  a  metlmd  so  devoid  of  nlcaniIl^^ 


GOi.n  i//\7.\7;  /.v  h'lioni-s-i.i 


1 10 


Tlu 


R 


miuilhlv    ]ir( 


(hut 


'(111   (it    ii( 


\liii(k'>ia  iKis  n-aclK-'il  J3.570  oz. 


1    (or    litillionl    from 
liL-n-  art-  two  or  tliric 


iiTidi 


■^triictiim.  wliidi  will  add  to  the  pro- 


duction of  luxt   \iar.     With  this  iiicri'asi-  and  the  intro- 
duction of  a  coiwtant  supply  of  A-iatic  lahor,  the  jirolia- 


hiliti 


arc  that   an  (iut]ir*   of  40, (xx)  oz.   will  he   rcac 


ichcd 


witiiin  a  vcar  or  so. 


MINE  LABOR  AND  COSTS  ON  THE 
WITWATERSRAND 

Bv  T.  Lane  Carter. 

(Ucctmber    31,    1903.) 

The  scarcity  of  Kaffir  lal-)r  on  tlic  Rand  has  made  for 
efficiency  in  its  use,  so  that  today  the  native  workers  are 
handled  ninre  skillfully  dian  in  ante-bellum  days.  At  one 
time  too  many  Kaffirs  were  allowed  for  a  job.  whereas  now 
the  number  is  cut  to  the  lowest  point.  For  instance,  in 
1899  machine  drillmen  were  allowed  six  natives  to  run 
two  rock  drills.  Now  the  work  is  done  by  five  Kaffirs. 
The  limit  of  efficiency  with  Kaffirs  is  soon  reached  because 
of  their  refusal  to  respond  to  the  contract  system. 

The  following  figures  from  a  lar,  gold  mine,  of  work- 
ing costs  during  a  month  before  the  war,  and  of  a  month 
after  war,  are  of  interest : 

In    May,    1899-  '"   J""^'   ">"} 

Totnl  mimher  of  K.iffir^  at  work  .        2,304  l.I.s6 

AvfraKCMiumbtr  of  sick  and  idle.          4'i-  "^'' 

Co>t  of  recruiting  a  Kalhr £2  lOs.     4d,  £2  125.  3d, 

Average   wages   earned  per   na-  o  ^    ,  , 

tive  per  shift io     is.     8  70ld.  £o     Is.  8.6qid. 

Average    cost    per    ton    of    ore 

broken  in  slopes  by  machines.  £0  7s.  10  f&Sd.  £0  ()>  g.02d. 
.Average    cost    by    hand    sloping 

(Kaffirdriliers) 20s.    (about)  £0  lis.   I  .71  Jd. 

.'\veracc  number   of  tons   shov- 
eled per  native  per  shift 2.164  2,246 

.•\verage    number    of    tons     or'  o  a   ■ 

lirokrn  per  machine  per  shift,       i<.i't>  H.6A) 

Width  of  slopes  in  inclies 55  '"  ?5  '"■ 

U'orkinp  Costs    Inclusive  of  Dc:\-loti>ic>il   and    llccid-Oificc 
Cliargi-s,  /rr  Ton  .V"   i. 
Mining    (including   all    develop- 

iiKiU   or   (levelopinent-redcnp- 

1,011   charged io  •:-.     7.8541  £0  lis    ,,2J4, 

Snrf.-ice   transportation d  5551  ,  3.'2.s»> 

Sorting  and  crnshiiig ■*  ",-^-''  2171' 

Milling    --     -^■^''■\-  ^"rVi 

CN,u.iding   ^^      "■■;^4l..  jv  0.380,. 

General      _^^j^84 1  d, I  s^J_03od. 

Total  cost  per  ton ii     3S-     i.45i<i-     £0  l8s.  9.  I38d. 


! 


inTir.lTERSRAND  LABOR  .-l\D  COSTS  l.ll 

Tile  minibcr  of  Kaffirs  required  to  run  present  erected 
stamps,  on  basis  of  milling  348  days  per  annum,  and 
maintaining  ore  reserves,  is  2,5     '. 

It  will  he  noted  that  there  is  practically  no  savinp;  in 
Kaffir  wages.  The  wage  has  gradually  conic  up  to  what  it 
was  before  the  war. 

The  most  interesting  figures  deal  with  the  comparative 
cost  of  stoping  b\  hand  pcnver  and  machine  drills.  The 
figure  as  given  was  not  accurately  determined  for  this 
month,  and  is  therefore  approximate.  It  has  frequently 
been  maintained  that,  on  the  Rand,  ore  can  be  broken  in 
stopes  ciieaper  by  hand  labor  than  by  rock  drills.  These 
data  prove  the  contrary ;  true,  the  tonnage  broken  by  hand 
power  in  June,  1903,  was  small,  and  the  cost  would  be 
less  with  a  greater  number  at  work,  but  tliese  figures, 
and  the  figures  of  other  mines,  prove  that  it  would  be 
uneconomical  to  substitute  lir>nd  labor  entirely  for  ma- 
chine drills. 

In  stopes  of  5  ft.  or  more,  machines  are  preferable. 
The  proposition  is  different  when  the  reef  is,  say.  12  in. 
wide,  and  it  is  desired  to  keep  the  stoping  width  narrow. 
P>v  hand  drilling  a  stope  can  be  carried  20  in.  wide.  Tut 
a  rock  drill  in  the  stope,  and  in  most  cases  the  width  will 
go  up  to  40  in.  With  hammers,  the  cost  of  breaking  ore 
in  the  20-in.  stope  would  be  higher  than  in  the  40-in. 
stope,  but  in  the  narrow  stojie  the  assay  value  o-  the  ore 
trammed  to  the  shaft  would  be  nearly  twice  as  high  as  in 
the  40-in.  stope.  This  question  of  'hand  drillers  versus 
machine  drills"  in  stopes  is  a  vital  one  for  every  mine  on 
the  Rand.  F.ach  stope  should  be  made  a  separate  study, 
before  deciding  to  work  it  with  hammers  or  machines. 

It  will  be  seen  that  the  greatest  reduction  in  costs  has 
been  under  the  head  of  mining.  This  is  due  principallv 
to  two  causes:  (i)  Cheaper  dynamite;  (2)  labor-saving 
devices   underground. 

-As  regards  the  efficiency  and  cost  of  white  labor,  there 


l.-,L'  ////:  /:CO.\O.W/c'.S-  (;/■   MI.\'L\C 

;s  little  iliaiit;c.  .\>  far  as  divclnpiiKiit  work  i;-  '-■nn- 
i-t.TiR(l,  ihc  standard  is  imt  as  lii^h  as  it  was  previous  to 
the  war.  llic  iinprission  lias  i^'aiiicd  i^round  that  in  dc- 
vi'ldpnu'Ht  wnrk  thiTc  i>  more  dan^aT  from  miners' 
phthisis,  and  the  men  are,  therefore,  shy  of  the  work.  A 
sloper  ean  earn  as  mueh  as  a  driver,  and  has  less  risks; 
hence  the  hiil  for  the  stupes.  It  may  become  necessary 
to  arran,!,^'  pi  .ees  so  tliat  the  man  who  drives,  raises  or 
sinks   ean  earn  more  money  than  the  man  in  the  stope. 

The  eniplovment  of  white  unskilled  labor  on  these  fields 
on  a  iar^c  scale  is  now  iiraetically  abandoned.  The  ex- 
periment was  a  failure.  Take  these  figures  from  a  big 
mine  : 

Kate  per  -hi ft  to  iin-killed  wliito  labor,  e.xclmlitig  food     5s.  8,;i?<l. 

Kate.  iiicluduiK  food .  8>.  7,02-'d. 

Average  miniber  of  natives  (li--iilaced  by  one  wliite 
man  ( for  thi.-  nnne  only,  wliicli  is  above  tlic  avor- 
aRc)     ...... 1V4 

Total  increase  in  working  costs  and  capital  expendi- 
ture in  period  (a  few  month-)  if  all*  natives  had 
been  replaced  by  unskilled  white  labor £30.046 

It  is  said  that  there  are  at  present  2,000  men  out  of  cm- 
plovment  on  the  Rand.  To  hel])  tliis  bod\  of  men,  the 
^(ivernmcnt,  which  runs  the  railroads,  is  otTering  to  take 
on  unskilled,  whites  at  ^2  per  day. 

Ouite  a  number  of  the  unskilled  whites  were  employed 
as  helpers  on  rock  drills.  After  a  few  months'  experience 
they  obiained  blasting  certificates,  and  as  far  as  the  min- 
ing regulations  are  concerned,  were  the  cijuals  of  men 
who  had  been  mining  for  years.  These  men  went  to  other 
mines,  showed  their  blasting  certificates,  and  were  set  at 
work  on  rock  drills.  Needless  to  say,  they  were  not  ex- 
pert. A  first-class  rock-drill  man  does  not  learn  his  trade 
in  two  months. 

(  M'  the  large  number  of  unemployed,  it  is  safe  to  say 
that  'in'v  a  small  pereeiUage  are  really  skilled  men.  '1  he 
I)ig  majority  are  either  wit'nout  a  trade,  or  'wasters.'  'this 
is  the  crudest  place  on  earth  for  both  classes.     First-class 


WITlV.VrP.RSRAXD  LABOR  AXD  COSTS  l."):? 

rock-drill  men  are  hard  to  j^et.  Eighteen  niontiis  apo  it 
was  riiade  known  in  America  and  England  that  200  skilled 
rock-ilrill  men  were  wanted  at  1  minimum  wa_q;e  of  ii 
per  day.  For  that  f,aiarantee  70  or  iSo  men  only  have 
been  obtained.  Quite  recently,  arranj^ements  were  made 
to  pet  out  70  Italian  tniners  from  the  Simplon  tunnel. 
Some  of  these  have  already  arrived. 

It  will  be  seen  that  something;  will  have  to  be  done  to 
meet  any  bijj  demand  for  skilled  rock-drill  men  in  the 
future.  It  is  m\  opinion  that  the  outside  world  can  onlv 
partially  supply  the  demand.  Therefore  a  percentage  will 
have  to  be  trained  on  the  Rand.  This  has  been,  and  is  being, 
tried;  but  it  is  difficult.  As  intimated  above,  the  learner 
gets  a  blasting  certificate  in  two  months'  time,  and  passes 
as  a  skilled  driller.  He  is  a  machine  man.  possibly,  but  a 
very  inefficient  one,  expensive  to  the  company  at  any  price. 

A  possible  way  out  of  the  difficulty  would  be  to  have 
different  grades  of  certificates,  making  it  compulson.-  for 
a  learner  to  serve  at  least  a  year  on  machine  drills  before 
he  is  passed  as  a  skilled  driller. 


MINING  COSTS   AT  CRIPPLE   CREEK. 

1  he    Editor:  ..I.inuar>     ,-,.    .g..4.l 

SiK — Mr.  Finlay's  interesting  comnninication  (in  tlie 
Joi-RNAI.  of  Xovember  21 )  calls  attention  to  an  important 
and  mucli  neglected  tield  of  discussion.  If  detailed  fig- 
ures of  mining  costs  were  more  generally  available  there 
would  be  less  misdirected  efifort  in  mining.  It  is  often 
assumed  tliat  such  figures  are  of  interest  only  to  the  min- 
ing engineer,  to  enable  him  to  check  his  own  work  against 
that  of  others.  Their  most  important  value  is,  however, 
to  the  investing  public.  If  >uch  figures  were  more  gen- 
erally published,  it  would  be  less  easy  for  an  unscrupu- 
lous promoter  to  impose  on  the  inex[X'rienced ;  and  there 
would  be  a  better  apportioning  of  credit  to  deserving 
mine  managers.  Probably  all  visitors  to  mining  regions 
have  been  impressed  with  the  number  of  idle  properties 
which,  on  inquiry,  arc  found  to  be  idle  because  of  lack  of 
working  capital.  It  is  the  old  story  of  costs  under-esti- 
mated, of  a  scale  of  work  unsuited  to  the  character  or 
size  of  the  orebody,  and  of  waste  and  fruitless  effort. 
The  projectors  of  the  various  enterprises  have  usually 
had  utterly  erroneous  ideas  of  the  cost  of  the  work,  and 
disaster  has  been  the  lesult.  Again,  it  has,  unfortunately, 
happened  to  many  mining  engineers  that  their  best  efforts 
were  thwarted  by  lack  of  appreciation  of  the  significance 
of  figures  presented,  on  the  part  of  their  own  board  of 
directors.  In  the  case  cited  by  Mr.  Finlay  the  fact  that 
low  mining  costs  an  not  the  only  desiderata  is  excel- 
lently shown.  It  is  easy  on  the  other  h.uid  to  call  to  mind 
dividi-nds  paid  !)v  reason  of  tlu'  richness  of  the  ore-body, 
e\en  despite  the  absence  of  an,  skill  in  actual  manage- 
ment. 

It  should  be  t!ie  puri)i)se  of  all  iiUerested  in  the  mineral 
industries  to  promote  tlie  economical  and  efticient  ilevel- 
oijment  of  our  natural  resources,  and  certainl)  the  frank 
discussion  of  ci^sts  is  ;is  ersential  U>  this,  as  discussion  of 


MIXIXG  COSTS  AT  CRIPPLE  CREF.K 


i.<>.i 


iiu'lhods  of  uork.  IIo\vc%-cr  desirable  it  niav  be  io  have 
cciiiiplete  cost  records,  and  I  heartily  endorse  Mr.  I'inlay's 
position  in  the  matter,  it  is  not  always  practicable  to  do 
so;  and  many  engineers  hesitate  to  give  out  incomplete 
information  for  fear  of  its  being  misleading.  This  is  a 
real  danger  projjcrly  to  be  guarded  against ;  but  even 
incomplete  figures,  carefully  stated  and  analy7.ed,  may 
carry  their  lesson  without  promoting  misconceptions. 

These  considerations  shall  be  my  excuse  for  presenting 
tiie  following  partial  figures  of  the  cost  of  mining  7.087 
tons  of  average  Crij)ple  Creek  ore.  The  cost  i^er  ton  was 
$14.73,01  which  $9.06  was  for  labor  anil  S5. 67  for  su])plies 
aii(l  all  other  costs.  In  mining  the  ore  388,7^5  cu.  ft  of 
stoping  was  done,  e(|uivalent  to  54.8  cu.  ft.  per  ton  of 
ore  sold.  The  deveioj)ment  work  consisted  of  i,4if)  ft. 
of  drifting  and  100  ft.  of  sinking.  .\t  the  beginning  and 
end  of  the  campaign  the  ore-reserves  were  approximately 
equal,  if  not  somewhat  increase  1.  This  accordingly  rep- 
resents roughly  the  amount  of  development  work  neces- 
sary to  keep  the  mine  alive.  If  this  development  work 
be  figured  in  cubic  feet,  then  56,208  cu.  ft.  of  crude  ore 
aiul  waste  must  be  added  to  that  taken  from  the  stopcs ; 
or,  for  every  ton  of  ore  sold,  54.8  cu.  ft.  was  stoped  and 
7.9  cu.  ft.  removed  in  development.  The  work  was  done 
with  small  machine  drills,  the  average  of  sto])ing  being 
in  the  ratio  of  uo  cu.  ft.  per  machine  per  shift.  This 
ore  was  all  screened  and  hand-sorted,  so  that  the  7,087 
tons  sold  were  really  concentrated  from  the  34.759  tons 
broken  and  handled. 

If  the  costs  be  figured  on  the  bc^sis  of  this  crude  ore 
instead  of  the  concentrated  ore,  as  is  customary  in  other 
districts,  the  cost  figures  become:  Labor  cost,  $1.84;  sup- 
plies and  general,  $r.i<);  total,  $3.  Of  the  total  cost,  ap 
(JiO-ximately  $2.rKj  was  mining  cost  and  40c.  was  for 
development.  This  method  of  figuring  the  development 
cost  back  to  the  ton>  sold  is  unusual,  but  has  advantages 


ir.o 


77//:  l:C(>.\()MICS  Ul-   MIMXG 


wUvw.  as  in  the  pi\M.-m  case,  it  Ijccuuks  i>u>-ibli.-.  If 
in  a  i^iven  canipai.^n  the  (irc-re>ervi's  were  imtahly  dc- 
pk'tetl  i)r  iiicrea>eil.  it  would  Ir-  ilil'tk-uU.  if  not  inipossihlc. 
h'.vcii  wluii  tlk-  costs  arc  rcchiccd  to  terms  of  crude  ore 
and  waste  broken,  C'ri|)ple  Creek  co-ts  are  lii,L;h  \n  coni- 
liarison  with  those  clscwliere.  Tins  is  (hie  n  part  to 
hi,s;h  hihor  and  ni  (lart  to  the  snialhiess  of  the  orehodit -, 
whicli  necessitates  the  liandhni;  of  much  waste.  In  tlie 
present  case  the  a\eraL;e  ihiily  w  aj^^e  was  $.V37  l' ""  •'" 
ciiihtdiour  shift,  less  Jo  minutes  for  lunch  and  ahout  lO 
minutes  at  chan,L,Mn.u'  time.  The  ti<,nires  are  his;her  than 
Mr.  linlav's  averat;e.  presuinalily  because  a  laruer  ]iro- 
porlion  of  machine-men  were  em])loyed.  C  >al  also  aver- 
aged liisher  than  in  the  case  cited  hy  him.  thoui,di  timber 
was  ahout  the  same.  An  effort  was  made  to  decrease 
costs  hv  increasiiiij  the  capacity,  and  it  was  found  that 
this  decreased  the  item  of  lahnr.  but  not  the  supplies. 
The  record  of  two  separate  montlis  is  triven  below: 

Laliiir  .sJurplifs   aii<l 

Testis   Si.Kl  C'list.  General    Kxpenscs.  j, 

ion         $11.02  $4  12  $15  14 

1,8/3 «05  4.90  >.'04 

Not  much  reliance  is  to  be  placed  on  these  figures. 
however,  in  view  of  the  .small  tonnage  and  the  consider- 
able diti'erence  in  costs  resultint:  from  variation  in  the 
amount  of  development  work  carried  on.  The  particular 
months  given  were  chosen  with  a  view  to  eliminating 
these  factors  as  far  as  possible.  Comparisons  made  be- 
tween these  figures  and  the  costs,  at  a  number  of  still 
smaller  mines  under  the  s.une  management,  indicate  that 
the  labor  co.st  ])er  ton  is  not  influenced  much  by  the  scale 
of  operations  u])  to  a  monthly  ontinit  of  i.ooo  tons.  Com- 
parisons with  costs  at  plants  having  still  larger  outputs 
indicate  roughly  that  the  cost  iier  ton  shipped  is  influ- 
enced more  by  the  character  of  the  ore-body  than  the 
scale  of  operations.  jj    Poster   r..\iN. 

Washiimton,  D.  C.  Dec.  i8,  1903. 


MINING  AND   MILLING    IN   THE  MOJAVE 
DESERT 

(January    ^S.    igu4.) 

riic  liditor: 

SiK — riu'  Dt  sort  Rtjinn.  from  an  (.cononiic  stand- 
point, in  n-^ard  ti)  mininLr.  '''is  a  miinlxT  of  disadvantages 
tliat  iiiilitaif  a.^ainst  tlu-  pr  .titahk'  (.-xiractii  >n  and  rrduc- 
tum  (if  low-^radc  orr.  as  ciiin])arfd  with  nuirc  favorc<l 
liicalitics.  Ilk'  scarcity  of  water,  fut.1  and  tinihrr.  and, 
ni  siinu'  cisi.-.  an  entire  .alwoice  nf  the  same,  increases 
the  cost  f  mining;  and  reihictimi  to  such  an  extent  as  to 
render  the  mining;-  and  reduction  of  low-jj^rade  ores  un- 
remuiierative.  Tile  hist-named  coiichtions  o!)t;iin  at 
Rand>hur-.  Kern  coum\  .  Tahforma.  In  the  accompanx'- 
ini^-  tal)le  from  tlie  niontidy  re])ort  <if  l]u'  ^'ellow  Aster 
Mining  \-  Milhni;  (."onijiany  it  will  he  seen  that  low-Lrrade 
ore.  Irom  .^,^50  up.  c.iii  he  mad^'  to  yieM  ,1  i^ood  profit, 
under  projier  conditions.  The  ahove-mentioned  mine  is 
equipped  witii  two  mills.  <Mie  of  nxi  and  the  other  of  50 
stamps,  reducin,!;  500  tons  of  ore  a  da\-  on  an  averaije. 
.Mthouyh  witliiii  a  distance  of  two  miles  of  the  terminu.s 
of  the  railway,  freights  are  hi-li.  as  will  he  seen  from  the 
])rices  of  suppll?s.  a  f ^ \v  of  the  important  ones  heing  ap- 
pendei]  herewith  : 

hue!  oil,  4]c.  per  i^al. ;  lumher.  S32.50  per  tliou.sand ; 
other  supplies  in  proportion.  Water  is  ohtaineil  from  two 
wells,  ';nr.k  to  the  dej-th  of  450  ami  yit^  ft..  resiH'CtivcIv, 
at  a  mean  distance  of  six  mik<  from  mine  and  mill,  at  a 
point  1.500  ft.  helow  point  of  cK'liwrw  (  )n  .account  of 
the  strike  declared  aL^ainst  the  comp.-my  on  June  10.  1003, 
the  mine  remained  closed  until  Septemher  I  fo!lowin,i.j. 
Since  that  date  t!ie  miiie  has  heen  in  operalis^n  stcadilv  to 
its  lull  capacitw  with  non-union  emi)lo\i'es. 

The  following,'-  is  the  scale  of  wa,L,'es :    Miners.  ()  hour>. 


!] 


l.-.s 


THE  ECO\(hMICS  or  .UIMXC 


§^ 


;10 


n  c  £  s  '  - 

O  ij  z   ~   ~  ^ 


k-   l- 

D* 

'•J 

V- 

'X  5 

^ 

'*"  X 

^  X; 

u 

E.i 

o 

5 

r    -' 

0^  "3 

Is 

H 

/ 

^X 

(J 


S 


5  ^  i  i  3 


i^i    ir.  ~l    -  C 


r-ii  s 


:rv°5' 


^    ^' 


5  C  -1  -^  -r  -j-  -T  i 
Scocooo- 

ccccood'  — 


w  '/  V 


—  f^  ^ 


w  6 


K 

u 

g 

tJ 

s 

(/T 

u 

c. 

^  _ 

i 

6 

(J 

X 

^ 

g"^ 

Xt 

tj        ^  s  „  tt- 
y      2  y  £  -  = 


O  c  -^  —  ~ 


(J5  C-  *!  C-  I"-.  5.  C  VT'  11? 

n  r^  T-  ".  -  C    c  'I    04 

i-i  c  o  c  c  c    -T  ^    ^1 

oococc^c^^ 


B  c  c  T-  ;i   t^ 

"-    O   O   O   O     "I 

c  c  o  o  c   6 


"4      O 

'  :^    -r 

;  r^    C         C 


Qi   Jii 


r^   -  'i? 


>< 


i 
i 


£-1 
o 


-  -  -J  =0 
i  i—  res 
-  -,  &  ^J^  Z  a  c „ . 

.:i,uJ2:  —  —  —      ^.^-jaixas 


-    0^ 


-.?; 


gSi^gg.' 


—    ^    «-    ^    —    zr  -*  _i-    -i/ra—  -  —    ;::    rz   ■• zi    ->  — 

re^-.- =  «•-,:?,  ^--      =  a.  _i  :£: -r  ai  ^. 


M  c 
ci 


MIMXC  IX   Tllfi   MOJ.irr.   DllSP.RT       ir.!» 


$3  ;  imickcrs,  <)  lumr,;.  $2.50  :  car-nu'ti,  i)  hours,  $3  ;  tim- 
ber tiuMi.  ()  hours.  $3.50:  aiiialf^Miiiators,  u  Ivmrs.  $4; 
Stationary  (M^'iiu'crs,  u  hours,  $4:  hoisting;  cn;,MiK'ers,  8 
hours,  $3.50:    iJuinii-nH'ii,  u  liours,  $,^.50. 

KidENE  H.  Barton. 
F?ani!shnr{^,  Cal..  Dec.  15,  i</)3. 


COST    OF    MINING    ZINC    ORE    IN    THE 
JOPLIN    Pl^TRICT 


I  lie  l.ditcir: 


I  i  iliruary  j5.    ivm. 


SiK — Vour  reviews  ni  ilu'  lead  ami  /iik-  prudiuium  aii>l 
the  J  :,lin  district  :i  ymir  is»iics  ui  JauuarN  7  ..iid  14. 
and  tlik  di  .u^'Mis  m  iiinre  recent  i>siK'>.  have  aiiiaeicd 
iii>  atluiii'in.  1  he  vkw>  expri -.miI  as  t"  ilii.-  in.-,!  of  inin- 
in.i;  ;:iiK-  (in  in  the  Jo|)lin  district  recall  a  iir(ii)leni  uincli 
pre-ented  it>elf  h>  \\k    iliunt  a  \iar  aLju. 

Xa'.urallx  cn..u-h.  it  i>  p.iimlar  ainmi^  the  nniu  npi.T- 
atiTs  \n  relei  the  cost  nf  mininj^  {u  unit>  ct  iht-  iirnduct 
sold.  A  statement  like  the  fulluwin^'  is  very  sim;,!,-  and 
easily  iindrrst,..id  ;  /jiu-  ,irc  sells  for  $^^4.  tlu'  cn-t  of  niui- 
inj,'  and  r.^valf-  amounts  to  $_'S.  ami  tin.'  \t\->'\'-  is,  iliere- 
lore,  $<i  jht  ton  of  zinc  ore.  This  nuth'  d  nf  calcnlatinn 
may  imt  h.  olijcctionalile  as  aiijiliul  in  a  particular  mine 
prodncinL;  >  '  ni  uiiif"rm  ru'me--,  hut  it  ;  readil\  slmun 
that  to  j^emralizi.-  witli  siicli  istimatcs  ^f  cost  ina\  in  vt.r_\ 
inisleadin.^. 

It  costs  practically  ti:c  sanie  to  mine  and  mill  niatiria! 
\irldin-  5  per  cent  of  clean  /inc  ore  as  it  di'cs  if  the  mine- 
run  oir  \itld^  10  ])cr  cent,  i  -it  the  operating;  cost  referreil 
to  a  ton  of  product  in  tlu'  former  case  is  aliont  double, 
iiie  royalty  chari^as.  on  the  otlar  hand,  are  a  delinitc  per- 
centage of  the  receipts  from  ore  s.iles.  and  are,  therefore, 
proportional  to  iIk-  srllui-  ijrice  a:.d  amount  of  clean  zinc 
ore  produced.  The  determination  of  the  cost  ,,1  jimduc- 
lion  of  a  ton  of  zinc  ore  may  lie  further  complicated  when 
a  considerahle  part  of  tl,.  ])ro<luct  of  the  mine  is  lead  ore. 
The  price  of  lioth  k'ad  ami  v'mc  ore  are  -uliject  to  chan^cfef. 
f"""  W'  to  week,  aiid  are  po-  'lily  char,i;ealile  also  with 
dilterent  rati  -  of  ro\  ah\ . 

I  Ik  tahle  piven  herewith  was  calculated  to  meet  iust 
.such  ;i  pmhleni  under  conditions  where  the  mar-in  of 
profit  w.is  siuall.  and  liktly  to  he  altooether  wip,ed  out  hv 


COST  ()!■   MIM.W,   /I.W  oia 


Hit 


o 


:^  3.  5  8'  5  o  o  o  c  -  —  —  —  —  'I  IN  -I  '1  'I  "-. 


*' 


as 

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5 

Cl 

Ci 

< 

bj 

^ 

«i 

-^ 

CO 

-'. 

^ 

'N 

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>, 

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li: 

^ 

i; 

1") 

o 

^ 

u. 

<^ 

O 

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Ul 

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as 
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« 

~i        X    O    5   ^  -i  X    5    'l   ""•  1^  y  —  f^.  ir,  1^  C  —  ".  "■.  1^  ?< 

obbobo------ -- 


««•     y;  Z  ?.  ?.  ~  »<  xS  5  c  c  o 
Qodoood---- 


■^,  tr,  1^  C   —    ^,  ^r.  1^^ 


(^        O   C    rx  l^X    "*    C    C    —    "I    "I    r^.  -t  -♦  "■    C    I^  (  xX    ^   CT 

■N       -r  5  5C  5  -1  -r  1^  J  —  ".  "■.  1^  cy  —  ".  "  1^  r  -  "  "■. 


.7. 


o  o  o  o  o  o  o 


_    _        'I  *i  r^,  -r  -*■  f.  w  1^  i^x  :? 

^1    .r,  1-.  I  -   :'.  ir.  -      -         --   - 


^     n  ^4  ^  "^  ^  .^.  r.  I  -  -.  .r;  !>.  r  -  "  ..;  i.v;  -  -. 


X^C    300000 


'% 


<n        i   O   InX  X    -    C    ;    -   -I    -I   ~-.  -T  -I-  1^.  _    1^  l^X    ;   ~ 

'»•     X  X,  X  "Z  X  ?  r  c  r  ?  o  o  o  G  c 'I 


^, 


ocooooooo 


i^xxx-Z>!  ^~?r-^-  "  -  " 


o  o  o  c  c 


O   O   O    0  o 


".       C  C   l^X  X    ~  O    O    -   -I   -I  „ 

vi      l>  l^X  xxxx  ~c^~^^i■oc  c  cc 


ty    o 


-1       w  t^X  «  ~  C  -  -  -I  "■.  '^.  -T  •>-,  ■/-.  c  r^x  -4  :■  O  5 
'/f      1 ,  n.  1-,-^  X  X  X  -it  c-  c  c-  r  5  o  c  c  c  i 

QOOOCOOOOOOCC 

'»   i,i,.T;,i^xxMxx:r~c^cC-ccccS-- 

cooocdodoccccc --- 


O  1^  In.  1^  ^  C^  O  «  —  "I  ^.  r^,  -t  ir.  ir.\C  t^x  X  C^  Q  C 
,  '  C  -1  —  i  X  -  ".  10  1^  r-  —  ".  ir,  1^  J  -  ".  ".  I^  O  'Nl 
</>•   1^  1^  W  1^  I^X  XXXXC-C^OC.COCO-- 


T3>''"'  gooocoooocccccc 

C3  -_;  u  //>- 


J,  u   •  >o\a  r^x  z.  O  — 


ll- 


;///:    l:L().\(.K\IU>>    Ui     .\ll.\l.\i. 


.1  iliMj)  ni"  a  ii.\\  clnllar>  in  llic  ]>ri'  i|  iitluT  Uad  i  t  /iiu' 
i.rc.  1  lie  nuiH'-nm  ^lu'Wcil  a  \ii.  uiiilnrin  \ul.l  t.l  _■  ,^ 
piT  cent  /itici'Ti-  aiui  i.i  )nT  iiiit  Iiail  'If,  laliulaiiil  in  mi 
the  results  (if  iiiilliiiL;  i-'.-77  t.ai-.  Altli.  m-h  \\\v  mcM 
varird  I'racti' •nails  I'l'iii  ila_\  ti.(la\.  llu-  averam'  I'lr  aii> 
111, , nth  (hil  n-i  var>  in.  .re  than  n.\  \nr  eeiit  li.  .in  that 
adi.pti-d  in  llu  |ire|Kiraii(iii  ..f  the  laliK  ;  the  ti.i;ures  reine- 
sent  the  eakulaleil  net  cash  Mel. I  jier  t.n  '  f  inme-rnii 
afier  the  ])a\inent  ..f  the  n.\all>.  (Hit  of  these  ani.niii;-. 
the  cnst  .'t  mining:  ami  millini,'  is  to  he  iiaid. 

The  use  ..f  the  tahle  may  he  illlustra'ed  hy  an  example: 
A-Minie  tliat  /itie  <.re  is  sellinj,^  an  a  $j8  basis  fur  <>o  per 
eetit  ere;  that  the  ore  eontains  some  iron,  and  must  pay  a 
|Hiialty  of  $_•  per  ton,  fetehin^'.  therefore,  $J(>  per  ton  m 
llu-  hin;  and  that  lead  ore  sells  for  $.'5  per  th.iusand 
]ioiin<ls  in  the  J)iii.  I'nder  these  conditions  a  reference 
t.i  the  tahle  shows  the  net  cash  receipts  to  he  equivaient 
I.I  $1.0,^.^  per  ton.  and,  if  the  operatin.i,'  expense  i-  ?i  per 
t.  11,  the  niarj.;in  of  jir.  itit  is  3.3c.  ])er  ton  of  ore  mined  and 
inilled.  Should  zinc  ..re  prices  decline  $2  per  ton,  then 
receipts  would  fall  to  $().(/)_>  ])er  ton.  and  the  mine  would 
-how  a  small  loss.  Since  the  cost  of  inininj;  is  .tjiven  hy 
our  Inioks.  a  reference  to  this  tahle  affords,  at 
once,  tlie  data  for  an  accurate  estimate  of  jirospective 
pains  or  losses  under  ruling  current  prices  for  lead  and 
zinc  ores,  and  makes  prompt  action  certain,  if  changes  in 
prices  demand  it. 

The  tahle  is  useful  (Mily  for  the  particf.lar  combination 
of  vield  and  royalty  a>sumed.  but  a  similar  tahle  may  he 
prepared  to  repirestnt  any  other  combination  of  con<'.- 
tions.  When  a  mine  produces  zinc  ore  alone,  or  lead  ore 
alone,  the  problem  of  determining  costs  is  simpler  and 
lends  itself  very  nic'lv  to  representation  by  a  (lia,i,'ram. 
Such  a  diaijram  for  zinc  ore  is  presented  herewith. 

Th.e  sellintr  price  per  ton  of  ore  is  represented  on  the 
vertical  scale  at  the  left  of  the  diagram,  the  rates  of  roy- 


COST  Ol-   .l//.\7.\(,  Z/.Vc    ')Rr 


•a  30  15  10  „ 

Oprralore  Nft  RfCfiiiti  pt-r  To/i  uf  Zinc  Ore  afUr  DtHJu.-tiliK  Kojaltifs. 

Cost  Diaok.\.\i  fok  Joili.n   Zinc  Ores. 


164 


THli  liCOXOMICS  Of  MIMXG 


alty  arc  represented  by  one  set  nt  <lia^'nn;il  lines,  and  tla 
rates  "1  yield  of  elean  zinc  ore,  expre^ed  in  per  eeni,-'  nt 
nniK-rnn,  are  rejire'-ented  by  an.nher  set  df  diagonal  hues. 
The  hiiriznntal  seale  at  the  iHjttuni   shows  the  c>peratiir>' 
net  reeeipts  per  ton  from  the  sale  of  the  zinc  ore,  afur 
(ledncting  royalty,  and  the  vertieal  scale  at  the  right  ex- 
presses the  operators'  net  receipts  per  ton  of  mine  nm  lor 
any  combination  of  prices,  royalty  and  rate  of  yield,     t  Hit 
of  these  amounts,  the  ..peratnr  is  to  pay  his  working  co>t> 
and  make  his  pmtil.     The  use  of  the  diagram  is  e.xplainei! 
l)y  two  exanii>les.  nne    wherein  the  net  re   :ii)ls  per  ton  of 
mine-run  are  determined   for  an  as>uried  combination  of 
price,     royalty     and     yield:     anil     tlie     other     in     which 
the    working    c^  _-ls.    royalty    and    '.ield    being    assumed. 
the  selling  pric  is  determined   at  which  costs  and  receii)t> 
would    just    balance.      If   the   mine   yields  bmli   lead   and 
zinc,  the  net   recei])ts  per  dii  of  mine-run  may  be  deter- 
mined for  each  separately,  preferably  for  convenience,  by 
ditVcrent   diagrams,    the   sum   of   tlie  two  being   the  t'ltal 
receipts  per  ton.     \alues  lor  lead  I'res  may  be  shown  nii 
the  same  diagram,  if  desired:  but  since  the  relative  v  ield 
of  lead  ores  is  often  small,  a  different  scale  fur  the  >ield 
diagonals  makes  a  more  convenient  and  usefid  diagram. 
Another  use  of  the  diagram  is  illustrated  by  the  follow- 
ing  example-      .\ssume   the    selling   i)rice  of   zinc   ore   at 
$30,  royalty  20  per  ceiU.  yield  5  l)er  cent,  operating  costs 
$1  ix-r  ton  of  mine-run.     'i'ake  $30  on  the  scale  of  selling 
prices  at  the  left,  and  follow  the  horizontal  line  to  the  _>i) 
per   cei.i    royalty-diagonal,    then    follow    the   intersecting 
vertical  l.ne  to  the  bottom  of  the  diagram,  uii  wlncli  we 
read  $J4,  which  represents  the  ii]Krators'  net  receiiits  per 
tnii  i.f  clean  zinc  ore  .sold,  after  deducting  royalties.     Xmv 
take  Si.  on  the  vertical  scale  at  tl;e  right  of  the  diagr.un. 
f  .IImw  the  horizontal  line  to  the  3  per  cent  \uld  diagi>ii;il. 
then    icillnw    the   interse.  ting   vrrlical    line   to  the   bottom 
line,  on  which  we  read  ^Ju.      Tins  represents  the  working 


f! 


C'O.ST  Of  MIMXC  /.IXC  ORE 


10.-) 


cost  on  clean  zinc  ore,  and  the  ])rofit  must  be.  tlierefore, 
the  difference  lietween  $24  and  $20.  namely,  $4  i)er  tnn 
of  zinc  ore  sold.  This  will  he  seen  to  correspond  with 
the  calculations  in  the  first  exami)le  on  the  diatjrain.  As- 
suming that  HX3  tons  of  mine-run  are  handled  daily,  the 
]jroduct  will  he  3  tons  of  clean  zinc  ore.  and  the  jjrofit  hy 
the  first  method  is  fiL,nired  on  100  tons  of  mine-run  at  20c., 
nameb',  $20.  and  hy  the  method  just  explained,  the  profii 
is  on  I  tons  of  zinc  ore  at  $4.  or  $20,  as  hefore. 

The  cost  of  mining  atul  milling;  in  the  Joplin  district 
varies  from  80c.  to  $'  per  ton  of  mine-run.  This  fi.i^ure 
does  not  include  any  char<;e  for  redeemiuf^  the  capital 
spent  in  o])enin,t^  up  the  mine  and  e(|uipi5ing  it.  When 
the  ore-bodies  are  of  considirable  size,  the  mills  of  mod- 
ern construction,  and  the  operator  has  little  or  no  pump- 
ing; to  do,  these  fifjures  need  seldom  be  exceeded,  and  in 
some  cases  costs  may  fall  somewhat  below  the  lesser  fif;^- 
ure.  Between  these  limits,  costs  vary  accordini:;  to 
physical  conditions,  being  high  in  li.ird  sheet-ground. 
where  air-drills  nnist  be  employed,  and  the  ])owder  bills 
are  large,  and  in  soft  ground,  where  the  saving  in  the 
powder  bills  is  off.set  by  the  cost  (..  timber.  Occasionally 
an  operator  is  fortunate  enough  to  have  soft  ore  and  a 
hard  roof,  and  under  such  conditions  the  cost  of  mining 
and  milling  has  been  (|uoted  as  low  as  75c.  per  ton. 

Large  areas  of  sheet-ground  are  now  known  in  the 
Carterville  W'ebi)  City  district.  Most  mines  in  this  sheet- 
ground  vary  in  vield  of  zinc  ore  froni  2.5  to  3  per  cent, 
although,  in  some  cases,  Uiev  are  very  tnuch  richer 
.\dopting  $1  per  ton  as  a  frir  estimate  of  the  cost  of  the 
mining  and  milling  in  this  kind  of  ground,  and  referring 
to  tb.e  diagram,  we  get  the  prices  <if  ore  at  which  the 
mines  of  different  rate  of  vield  will  come  into  pri'fitable 
productivtn. 

In  making  comparisons,  the  effect  of  (|n;ditv  on  the  sell- 
ing price  of  zinc  ore  must  be  kept  in  mind,  for,  although 


160 


TIIF  ECONOMICS  OF  MIXIXG 


the  l)asis  price  for  60  per  cent  zinc  nrv  may  be  $30  per 
tf)n.  one  mine  may  produce  ore  of  so  hijjh  0  ^rade  that  it 
finds  ready  sale  at  $34,  whereas  another  mine  may  pro- 
duce ore  containing  niundic  and  will  fetch,  according  to 
the  assay,  one  or  more  dollars  less  than  the  hasi .  price. 

According  to  -ite  of  royalty,  from  10  t<i  .'5  per  cent : 
Ore  yielding  .i  ,    -  cent  will  pay,  when  the  zinc  ore  sells  at  $22.20 

to  $2(1- 
Ore  yiel(!iii>;  45  per  cent  will  pay,  when  the  zinc  ore  sells  at  $24.70 

to  $20  70 
Ore  yitldinK'  4  per  cent  will  pay,  when  the  zinc  ore  sells  at  $2780 

to  $.13  40 
Ore  yieldnii;  ,^  5  per  cent  will  pay,  when  the  zinc  ore  sells  at  $.31  80 

to  .v'^JO 
Ore  yielding  ,?  per  cent  will  pay.  when  the  zinc  on.  sells  at  $37  40 

to  $44.40. 
Ore  viclding  25  percent  will  pa/,  wlu-n  the  zinc  ore  sells  at  $44.50 

tn  $53  (X)'.  " 
Ore  yielding'  2  per  eent  will  pay.  when  the  zinc  ore  sells  at  $5S0O 

to  $<')7  Of)'. 

The  foregoi.Tg  data  serve  to  cni])hasizc  the  fallacy 
whicli  inav  devclnp  1)\  basing  costs  on  the  tonnage  of  zinc 
ore  sold.  The  richer  mines  }  ielding  "  to  10  per  cent  and 
upward  are  exceptions  among  the  general  run  of  Jo])lin 
mines,  and  those  uhicli  arc  nnnnng  on  ore  leaner  than  5 
per  cent  doubtless  constitute  tiie  majority.  When  ore 
prices  advance  beyond  $25,  the  4.5  per  cent  and  4  per  cent 
nn'ncs  start  up ;  when  prices  go  to  $32  the  3.5  per  cent 
mines  begin  to  produce,  and  at  $^7  the  3  per  cent  mines 
are  worked. 

Fach  successive  class  offers  to  the  market  more  ex- 
pensive ore.  and  conseipienily  the  average  cost  of  pro- 
duction for  the  entire  district,  referred  to  the  cleaned  zinc 
ore,  seems  to  advance  iiearK  in  proportion  to  the  ad- 
vancing ore  prices.  The  cost  of  mining  per  ton  of  mine- 
run  rem.'iins.  however,  pra'-ticdlv  u.nchanged,  evi-ept  for 
the  effect  of  changing  prices  of  l;ibor  and  ^np])!ies. 

W.   ."-^I'l-.Xn  R    Ih  CHINSON. 

Boston,  F  •  .  •    1004. 
'  F.'-timated  because  lieyund  the  limits  mT  the  ili,i:jrain. 


It 


MINING   IN    RHODESIA 

CMartli    10.    igu4.) 

I  he  Editor: 

SiK  —  hi  your  issue  of  L)cccnil)(.T  lo,  1903  (Vol. 
LXX\'I,  ])p.  885-888),  appears  a  very  interesting  and 
timely  article  on  'Gold  Minin^j  in  Rhodesia,'  by  Mr.  F.  C. 
Roberts.  It  has  an  especial  interest  for  m<',  for  many  of 
the  data  u]X)n  whicli  the  article  is  based  liave  been  fur- 
nished by  a  mine  in  whicli  I  am  a  shareholder,  and  of 
which  the  earlier  development  was  carried  on  under  my 
direction.  Mr.  Roberts  was  for  a  short  time  the  mine 
manaLTcr,  and  later  succeeded  me  as  engineer. 

Having  rpent  nearly  six  years  in  Rhodesia,  and  having 
had  exceptional  opportunities  of  studying,  a  large  portion 
of  that  section  of  it  known  as  Matabeleiand — and  it  is  to 
this  section  that  Mr.  Rol)erts  more  particularly,  though 
not  exclusively,  refers — I  would  like  tlie  opportunity  of 
offering  a  little  friendly  criticism  on  the  article  referred 
to.  In  mv  remarks  1  shall  keejj  in  mind  the  fact  that  an 
article  which  attempts  in  sucii  small  com]>ass  to  treat  of 
everv  feature  of  the  gold-mining  industry  in  Rhodesia 
must  necessarily  be  incomplete. 

The  first  statement  upon  whicli  1  would  comment  is : 
"In  but  one  instatice  in  tlie  whole  of  Rl.odesia  has  it 
been  found  advantageous  to  attack  the  orelwdies  and 
veins  tlirough  adits."  If  this  means  that  only  one  adit 
has  been  driven  in  Rhodesia  it  is  ver\  wide  of  the  truth. 
I  have  seen  adits  on  no  fewer  than  seven  different  jirop- 
crties,  and  there  arc  others  in  the  country:  and  I  iiave 
every  reason  to  believe  tlint  it  will  be  found  advantageous 
to  win  tiie  ore  from  more  tlian  one  of  tiiese. 

Physical  and  Gcoloi^ical  f-cafurcs.  —\\h\k-  it  is  a  fact 
that  "few  really  hi^li  mountain  rriULces  traverse  the  conn- 
trv"  it  must  be  borne  in  mind  iliat  the  geiier.  '  elevation 


ICiS 


7"/;7:  /:'c  OXoMltS  Ol-   Ml'  'XC 


i>  liij^h,  HulawuNo  l)t.'iiiLr  4,4(x^  tl.  alr.ivc  sca-lcvcl,  and  tlu' 
siiinnii'<  of  l!ic  lii^'lK'sl  hills  rcaili  an  I'lcvaiimi  ui  marly 
0,(xxj  11.  \  iowcil  I'roni  i1r-  plaui-  ami  vailcNs  tht-  liril> 
certainly  d"  nut  ap])iar  liit:h. 

!  :iad  no:  (ihsiTvcd  the  uati  ■  of  "conical  liill^"  in  the 
j^ranitc  holts,  th  ^h  1  haw  trawrscd  the  country  from 
its  eastern  houmlary  as  far  west  as  JJ''  20'  E.  lonj:;.,  and 
from  its  Southern  i)oundary  as  far  north  as  ij'  40'  .^. 
hit.  '  he  wea'herin^  of  tlu  granite  hills  111  Rhodesia  is 
the  s.iine  ■  in  other  parts  of  the  world,  the  ])revailini,' 
ty{)es  beini;  eitlur  domes  or  boulder-strewn  ridj;es  with 
ca  tellated  escar])nieiits.  The  conical  hill-  (more  cor- 
reciiy,  ])\ramidal)  arc;  ra'iier  liaracten>tic  of  the  schis- 
tose areas. 

It  i>  true  th.'it  "no  j.jeolo;.;ical  survey  has  yit  been  made 
in  'vhodesia"  (though  in  no  other  country  in  the  world 
is  one  more  lucdidi.  and  tlii-  .-'Seral  --o-called  '^eo- 
lopical'  niajK  of  it  ■,  hicli  have  been  nui)lished  have  no 
scientific  \alMe  wL.itever  ;  but  the  "generalized  descri])- 
tion"  of  the  i.;eol())j;y  j.;iven  !i\  .\li.  Ruberts  is  not  ve:'\ 
accurate,  if  not  actually  mi^leadini;.  i'jTouj::h  is  kno.vn 
of  the  subject  to  afford  a  better  account  than  has  b.i'U 
presented  by  .Mr.  Kol)erts  ;  biit  of  i  .urse  it  must  be  1111- 
(k'r  tood  that  be  w  riti^  a>  a  miner  rather  than  as  a 
geolo}.jist. 

We  are  told  that  "\'>\  far  the  i;rt.'ater  portion  of  tlu 
conntrv  consists  of  j^ramle  rocks,  in  wide  l)elts,  havin^L,^  a 
strike  somewhat  west  of  north  and  1  i^t  of  souih."  b'.veii 
if  in  the  term  ":.;raniie  rocks"  we  1  vliide  t\pical  ij;ranile. 
syenite.  ^niei-.s.  and  all  .u;r:mitoid  variitii>  of  rocks,  1 
lllink  .Mr.  Iv'berl^'  c-timate  'if  the  extent  of  their  occur- 
rence is  ,111  cxrissiMh  hiiL;li  one.  i  --hould  say  tliat  very 
much  less  ih.in  onedialf  the  total  ;irea  of  the  conntrx  i-. 
f^ranitic.  The  >tnke  of  these  rocks  is  not  accurately 
^ive;i,  iniKti!  no  '.^eiier.'il  sirike  prevails.  Some  of  the 
iarsrer  .i^iamte   belts  have   ,1   trend   almost   diu    e.ist-and- 


MIMXi,  l\   k'HODIiSI.-l 


IGl) 


west,  some  siiialler  oiks  trend  north-aiul-south ;  and  some 
in  fact  trend  in  alnidst  every  <iireetinn. 

While  it  i.^  true  tluit  "the  f;n!(!  heh.>  embrace  the  areas 
cliaracterized.  by  shites  and  schists,  "  it  is  also  trne  tiiat 
so.iie  of  the  jjoUl  mines  are  well  within  the  granite  areas. 
Thi..  is  the  i,use  of  a  t\pical  mine  descibed.'  the  imme- 
diate coinitry-rock  beinij  j^^ranitoid.  and  it  lies  on  the 
northern  side  of  an  extensive  f^rar.ite  belt,  trendinj;'  nearly 
east-and-west.  and  bouniled  on  the  north  and  south  b\ 
hills  of  metamorf)hic  rocks. 

We  are  told  that  "In  the  val!e\s,  or  small  <:;ulehes  of 
*be  Iiill  country,  the  alluvium  is  of  very  limited  extent. 
su,:^.i.;estinjj;  a  lack  of  those  extreme  climatic  c(Midition> 
necessarv  to  produce  rajiid  ero>ion.'"  Hut  even  if  it  werk- 
true^whicb  I  take  leave  to  doubt — that  the  alluvium  i> 
so  limited,  surely  the  fact  sufj^ests  somethini;  else  than  tliat 
stated.  Do  not  the  torrential  smn..ier  rains  account  for 
the  removal  of  the  alluvium  from  the  hill  country?  In 
the  broad  valleys  the  thickness  of  the  alluvimu  is  often 
verv  f^reat,  and  every  one  who  has  visited  the  country  is 
familiar  with  the  deep  rifts  by  which  the  river-fords  are 
usually  apjiroached. 

The  description  of  the  (|uartz  veins  miijht  liave  been 
extended  b\  a  reference  to  a  number  (if  lari,a'  (5nes  which 
are  not  only  wide,  but  may  be  traced  ahnost  continuously 
for  several  miles.  Reference  is  made  to  the  .auriferon- 
(liorite  o*  the  Avrshire  mine.  bui.  ;is  \i)u  jxiint  out  in  a 
footnote,  this  h;is  been  jireviously  described  in  the  jofi;- 
NAI.  at  LTreater  length.  !  am  irieath  interested  iii  Mr, 
i^oberts"  accouiU  of  bis  discovery  of  ;m  auriferous  liorn- 
blende  por]ih\rite  ;  id  i  wonder  if  it  occurs  in  a  ])art  of 
the  cotuitry  which   1  visitt'd. 

.Indent  ll'oikin^^s. — Some  of  those  who  liave  devoted 
much  time  to  the  stiuh  of  the  (luestion  of  the  ancient  race. 


"hk  l",N'iii\FFHi\i;  .\Ni>  Minim,  Ihiknm    p   !*^5.  Dec    lo.  irjo,'^. 


170 


77//;  l.LOXO.MICS  OF  MIXfXG 


or  races,  wlio  foniKrly  fxploitiil  the  RlnKlcsiaii  ^old- 
fields,  will  liardly  iVel  tlattcrcd  nn  l)cini,'  wM  that  "no 
satisfactory  expl.iiiation  h,i>  lucii  advanced  tuuchin<:j  tlieir 
(the  anrients")  idi.ntil\,"  iintw  ith.staniHnL:  that  i-thuD- 
j,'ra|)hical  invesiis^ators  liave  written  vohinies  on  the  snh- 
ject.  i'.ut  1  am  prejjared  to  ^o  all  the  way  with  Mr.  Roh- 
iTts  when  he  >|ieaks  of  the  estimates  that  ha\e  been  made 
of  the  jj^old  recovered  by  the  ancients  as  "iiypothetic" — I 
think  tliey  are  ridicnlons;  hut  I  cannot  believe  wah  him 
that  lo  dwt.  of  LTold  jier  ton  of  ore  was  the  mininunn 
vaLie  of  that  treated  by  the  ancients—  1  think 'they  nnisl 
have,  in  manv  cases,  treated  ore  as  low  as,  if  not  lower 
than,  5  dwt.  of  L;i>ld  tc  the  tun. 

l-'inaiuial  i'liusulcriilidiis. — We  ha\e  here  a  brief  bnt 
fair  account  of  the  tinanciiij;  of  Rhodesian  mines,  many 
of  which,  it  may  be  empliasized,  are  very  !arL,'ely  over- 
ca])itali/ed.  in  referriuL,'  to  the  Mineral  (  )rdinance.  .Mr. 
Roberts  omitted  to  mention  that  a  new  one  has  been 
drawn  up  and  is  e\i)ected  sewn  to  be  promulejated,  and 
from  which  the  objectionable  feature  of  the  'law  of  the 
apex'  is  to  be  eliminated.  Mr.  John  Hays  Hammond 
has  been  larj.^ely  blamecl — 1  know  not  with  what  truth — 
for  the  adoi)tion  of  this  indrtensible  feature  of  the  orij^- 
inal  ordinance.  I'.ut  as  the  new  ordinance  can  liardly  be 
made  retroactive,  it  is  likely  that  the  lawyers  may  yet 
rea[)  a  f^olden  harvest  from  the  obnoxious  law. 

.•J.s\?(iv  Plans.  —  .Mr.  Roberts"  de^cri])tion  of  these  as  in 
use  in  Rhodesia  is  correct  a>  far  as  it  L;oes ;  anil  it  is 
satisfactory  to  learn  that  while  slii^ht  dilTerences  of 
method  of  constructing,^  the  jilans  m;i\-  be  found  in  the 
several  mines,  "tlie  fuiidameiUal  princi])les  are  a.lhered 
to."  This  ijeneral  uniformitv  ot  p-inciple  may  be  larLjeiy 
attributable  to  .Mr.  J-'..  11.  i  .arthw  aite.  the  ^dvernnieut 
eni,Mneer,  who  has  made  a  s])ecial  study  of  sami)linfj  and 
mine-valuation,  and  has  been  in  a  position  to  imjiress  his 
views  on  the  comi/.inies'  ens^ineiTs.      1  he  ass.ay  diai^ram 


■ai 


MIMXG  l.\  RHODFSIA 


171 


fif^urcd  by  Mt.  RdlnTis''  so'jtns  to  iiio  id  Ikuc 
bi'i'ii  unfdrtimati'ly  s<.'h--cli.'il  aiul  iiiaccuratt.-ly  ikscrihnl. 
I  i!i>  n.  !  think  iIk'  use  nf  i,'rapliic  iliai^ranis  has  yet  ho- 
coiiie  };i.-iRTal  in  RhcHk"-ia;  nor  is  tiic  oni-  illustratcil  a 
"stojjinfj^  <Hai,Tani.'  1  r(.cni;iiizo(l  it  at  once  as  a  simple 
assay-])lan  of  a  prospectint^  level  which  was  opened  up 
under  my  direction  in  icSijj-cjS.  The  sUf^Lrestion  that 
assay  values  should  he  t;iven  in  shillings  tead  ni  troy 
penns  weii,dits  is  most  nnjiortant,  and  it  is  to  he  hoped 
that  this  system  may  he  ado])ted  in  tiie  near  future. 

Dczrlopmcut  llDrk. — It  is  d'flicult  to  offer  aiu'  criti- 
cism of  the  fij^j^ures  presented  by  Mr.  Roberts,  as  they  are 
incomplete  and  some  minor  errors  ajjjiear.  It  would 
seem  that  in  the  period  under  review  ^.''177  ft.  if  devel- 
0])tniii;  was  accom]ilished.  and  _^8.  kx)  tons  cf  ore  were 
won  and  milled.  Xow,  if  the  shafts,  levels  and  winzes 
avVraLTcd  4  by  6  ft.  in  cross-section,  and  allowing  14  cu. 
ft.  of  quartz  to  the  ton,  there  would  only  be  4,38<)  tons 
obtained  froni  tiie  footage  piven.  I'erhaps  the  decimal 
point  in  the  middle  column  of  tiL^ures  is  misi)laced  out' 
fit,nire  to  the  left,  m  which  case  the  tons  milled  would 
iivriire  out  about  .^Hio,  and  the  total  cost  per  ton  milleil 
would  he  $17.03  instead  of  Si. 70,  which  would  be  ab- 
surd. What  is  i)robably  the  fact  is  the  omission  to  men- 
tion the  area  stoped.  lUit  "stopas^e'  is  not  'footaijfe.'  If 
no  stopinp  is  inclu<!ed  in  the  cost  the  jirice  j^'iven  ]wv  foot. 
.Sj^.^o  (it  fi,trures  out  $-'3. 51),  is  excessive,  even  for 
l-!hodesia.  On  tiie  other  hand,  if  the  total  cost  of  mininix 
ore  is  only  !?l-7()  i>ev  ton  the  fij^ure  scenes  too  low.  Put- 
tins'  'f'l-'  (■"'■'St  of  ini!liii<; — which  i^  not  iriven — at  one-half 
that  of  mininij,  whicli  is  fair,  the  total  cost  per  ton  would 
only  be  $.m")8.  a  fii^ure  that  is  too  luw  for  Mr.  Roberts 
or  anyone  else  to  reacli  i'l  Rhoile-.ia. 

Then  the  *wo  ituus  "("om]iressors  and  rock-drills"  and 
"R'Jck-driUs  and   sharpening;"  toq;ether  amount   to  S21,- 


"  Tnt;  Fnoinef.rin'g  and  Mininc,  Joirnai,.  p  AS6.  Dec.  3,  ltx)3. 


ITli 


I  III:  I:l(>.\().\iils  or  Mi.\i.\(; 


')J'-).  mil  of  a  tnial  of  ^iS.^oo,  or  o\i.r  ,^J  (iir  iint.  Ami 
lierc  I  iiiii^lil  say  tliat  lln>  >ct'ins  to  cuiitinu  iii\  i'.\|irr^siil 
M|)nni'ii  ihal  al  tlu-  nunc  in  i|iK'sliiin,  i>\\iiis,'  to  tin-  scarnts' 
anil  lii^^li  fosl  of  fiul.  llic  iii.-tallati"ii  I'f  a  ci  inijiiussor 
plant  \\a>  iii't  .I'lvisalik-  until  cltiMper  lurl  cnuM  lii-  oh- 
tainril.  l'os>il)lv  soim-  |iart.  nr  tlu'  whole,  nf  tlu-  fust  of 
till'  coni|ircssor  plant  is  ini'ludcil  it:  tlu'  itiin  $iO,^i)i);  if 
XI.  a  poniim  at  lea-~t  "1  the  eosi  ci'  all  the  nihir  jilant 
sliotlld  In-  nuluilrcl  a>  well.  It  is  nut  worth  while  tn  ilis- 
eii>s  thest'  timires  further  until  aiMitional  li,L;ht  i-.  thrnwii 
upon  iheni  h\   their  author. 

MilHir^.  —  We  are  niformed  that  "  1  he  iiUroductinu  of 
heavv  >tanip>  with  the  lihjeet  of  securiuy  a  lartje  stanip- 
ilut\  has  nciw  reached  its  iiraclical  hunts,  that  is,  at  1.45O 
Ih."  1  )(ie>  n"t  this  weight  exceed  the  liniit"''  I  fear  so, 
,ind  the  fiar  is  |i,irtl\'  inspired  l)\  what  Mr.  i\(ilnrts  says 
further  un  the  stihirct.  When  I  drew  up  the  first  S]);cih- 
cations  f'lr  the  mill  under  review  I  calle<l  for  staiii[)S  of 
1.050  111.  f.dlini;  wei^dit.  hut  later,  011  consultiui^  willi 
some  of  the  leading;  eii!.i;iiiecrs  at  johanneshurLj  and  I'.ula- 
wa\c),  I  .-litired  the  specification  to  1.J50  II).  lint  tlie  mill 
was  ultimatel\  erected  under  Mr.  Knherts'  direction  and, 
I  prt'sume,  accoriliiii,^  to  his  specifications. 

Cxtiiiiiiatioii. — Mr.  ivoherts'  remarks  on  this  si;hject 
are  interestiiiLj  and  im])onant.  It  ma>  he  questioned,  as 
he  pninis  iiut.  whel!;i.r  it  is  advisal/le  to  instal  a  c_\anide 
lilanl  in  Rhodesia  so  lonj;-  as  the  ore  continues  free-niill- 
iiii.:.  There  would  he  no(|uestion  of  its  advisahility  when- 
ever the  sulphide  ore  is  reached.  It  is  all  a  (juestion  of 
testing,'  for  e.ich  particular  mine. 

I'erh.ips  1  feel  ail  exce])tioual  interest  in  .Mr.  Rol)erts' 
ar'ii^de.  dealini;'  as  it  does  with  a  mine  of  which  the  first 
di'velii])iiieut  was  done  under  m\  diri'Ction  ;  hut  it  sliould 
have  ,-1  L;eiiei;il  interest  as  wi'll,  and  it  's  only  to  he  re- 
^'relted  tluii  11  was  iii.t  liiui^er  and  iiior''  detailed. 

.•1  1     •     T  ,-     .    „ .  W  ALL  \(  I'.   1  Iko  \i  I- 


THE    ECONOMIC  RATIO   OF    rKHAriWH.M 
CAPACITY   TO  ORE-KESERVES 

\'\     III        I  |.in\l  U. 
(March    J4,    ly  >4  J 

Altlioiigh  every  metal  miiu'  i>a  iiiciliKin  pii-uliarto  itself 
t(i  >ucli  an  extent  as  to  up.sei  iii">t  f;eiieralizatiuii>,  it  \sill 
lie  nnt  wholly  useless  to  coiitein]ilale  certain  pmhlcnis  in 
tlie  abstract.  In  varmus  f<irin>  they  confront  every  engi- 
neer, sooner  or  later,  and  althnugh  (li>cussion  involves 
innch  reiter.ition  of  eleinentarv  jirinciples,  yet  there  an 
so  main'  mines  in  which  eviii  elenuntary  matters  of  j;(><iil 
man.igement  are  continually  disregarded  as  tu  warrant 
such  repetition.  The  ensuing  discussion  applies  mosil_\ 
to  that  great  maiorit\  nf  uiinis,  the  unciTtainty  of  wIiom. 
continuity  in  depth  necessitates  in  every  jiroject  of  general 
]iiilicy  a  suhst.intial  margni  of  security  against  the  un- 
known. Starling  with  an  assinnptiou  of  mihrnken  con- 
tiiuiity  to  their  utmost  hoinidaries.  our  South  African 
trieuds  need  hut  little  outside  .f  compomid-mtercst  tahles 
upon  which  to  found  their  hnance.  In  the  great  majority 
of  mines,  howe\er.  the  roidt  i>i  developiuent  ;it  their 
lowest  levels  remains  speculative  and  gives  a  zest  such  as 
an  asstnued  persistence  can  never  afford. 

'riial  the  most  economical  ..nd  pnilitahle  treatiuent- 
capacity  is  the  maxinnun  capacity  which  can  he  emjiloyed, 
is  not  difficidt  to  demonstrate;  that  the  maximum  must 
depend,  hnw'^ver.  upon  tlii.'  speed  of  devel' '|)nuni,  and  that 
devclo]inient  must  he  jnished  as  fast  as  the  limitations  of 
nature  will  iiermit.  is  hut  to  st.ate  a  corollar\ ,  \\\.  curious 
as  it  seems,  the  numher  nf  mines  which  h;i\e  heen  op- 
crated  ujKin  the  iirinciiile  that  the  mil!  is  the  hxed  (]u;in- 
tity  and  the  mine  the  \;iri;ihle.  exceeiK  the  r.umher  con- 
ducted upon  the  reverse  jilan.     'The  oljjective  of  develop- 


Ill 


/  ///.  /:co.vn.i;/t  .s  oi  .mimxg 


iiuiit  m  till-  [lU  |i' iihUratnL;  miiiilKi'  i-  i"  inil  :lu-  null. 
'I'iiis  ,i>>fnii  11  1-  \iriiK<l  ii_\  ilir  i.ni  liiai  uliiii-  ilu-  iiKi- 
jnnt\  III'  iiiiiH?.  iii'w  111  iiinratii'ii  ari-  iiiurr  tliaii  ti'ii  years 
old,  mviTtlu'lcss  a  iiiiiinr  iiuiiiii(.r  lia\i.'  riai.luil  ,i  iKptli  of 
osiT  j.iHH)  It.  wIrii  tlk>  mif^lit.  (.•Mil  ill  till-  (.niiiparatively 
sliiirt  prriiiil  have  attaiiK'il  a  ikjitli  of  3,CKXi  ft.  jia-l  tlu-y 
|)iir-.tu-il  iliv  pnljcy  ni  (k-vcldpnu'iit  hikKt  lii^'hfs!  pii'ssuro 
and  till'  iTi'ctiiiti  nf  iriatimiil  tiiiit>  siuli  as  would  keep 
the  i)re-e.\traetiiiii  elo>e  tn  such  develi  ipinent. 

It  will  he  j,M-anted  that  tlie  true  (ihjective  nf  luiiiitijj;  is 
tD  ^am  the  j.;reate>t  prntit  in 'in  a  .L;iven  hndy  nf  nre.  The 
luaxiiiinm  mitpiit  i>  iint  mily  iieeessar_\  i"nr  the  cheapest 
])rnihutinn,  htit  money  Ineked  up  in  nre  luider^rniind  is 
idle  nmney.  and  the  prntits  from  mining;  ean  he  increased 
ill  iin  mean  de_i,'ree  h_\'  reuderinj,^  it  lii|uid.  'There  are, 
however,  limitations  ituposed  iipoti  the  investment  of  lars.;^e 
sums  of  inonev  in  e(|uipmeiit  to  secure  the  maximum  out- 
put, in  view  of  the  uncertainty  of  cnntimiity  in  depth, 
wiiich  need  to  he  consiilcred,  in  considering::  these  limi- 
tations, and  a  method  by  which  the  economic  ratio  may  he 
arrived  at,  it  will  he  necessary  to  demonstrate  the  fj;en- 
eraliy  accepted  proposal  already  laid  down.  The  problem 
mav  l)e  reduced  to  the  (|uestion  of  conductini,^  operations 
uiion  a  ^iven  output  as  aj^ainst  a  fjrealer  output,  because 
few  well  niana.s.;ed  mines  of  the  character  under  discus- 
sion are,  in  their  initial  statjes,  eciuijiped  to  tiieir  maxi- 
mum possibilities — and  certainly  the  .^^reat  majority,  as 
shown  above,  are  not  yet  so  ecpiipped  ;  therefore,  the  iimh- 
iem  in  actual  jiractice  presents  itself  either  in  the  form  of 
increasiii!.::  the  output,  or  determining;;  iiri<.rinally  some  vol- 
ume of  output  to  be  provided  for,  as  aL^ainst  some  smaller 
volume.  We  may  call  the  initial  treatment-capacity  the 
primary  equipment,  and  the  increased  plant  the  secondary 
ei|ui])ment.     The  factors  in  this  jirobleiu  are: 

(i)  The  cost  of  production  as  aftccted  by  increased 
output. 


U'.h  I  I  )■   .l.\n    ()A'/;-/v'/;.S7:A'/7  .S 


1' 


(J)      I  lie    lull  lll|itli  III    (,|'    i,;i|iU,i!    MUrstid    III     M'ldlldarv 

•  •i|iii[imrnt. 

{  })    l.imitatiniis  illl])l'^(■(l  li\   tlu'  niuiTtainly  nf  contin- 

lli!_\     ill   ili|ltll. 

(i)  Ilk'  I'lalii  iraiinii  -f  ai'inmit^  diinn;,'  tlu-  jia^t  lias 
intrii(liu-i'(l  t('  till-  iiij;iiu'(r  niaiiv  cnm|iln-atiiiiis  ot  ininiii^; 
linatu'c  wliicli  .lid  not  Irmihk  our  forcfatiuTs.  W'c  now 
ilividi'  the  v.'lrillU^  ehar.L;e--  af,Minst  uurkinj^  expense^;  into, 
("list,  those  chari,'es  variable  \\ith  toniiaj^e  ( siicli  as  devel- 
opiiU'iU,  haulaj^e,  treatment,  eti-  I  ;  and  second,  those 
chart^es,  nsiially  referred  to  as  lixed,"  whieh  deiiend  ])ar- 
tially  upon  the  element  of  time  as  well  as  tomiajj;e,  and 
imlude,  jiartiy  or  u  holly,  piimpiiij^,  management,  amor- 
tization' of  capital  invested,  etc.  Moreover,  there  is  a 
factor  of  no  naan  importance  arisiii!,'  from  t!ie  loss 
of  interest  tliroiif,di  idle  profits  locked  up  in  ore  staiidiiifj^ 
in  the  mine;  this  also  must  he  taken  into  account. 

I'Vom  the  standpoint  of  such  fixed  charj^es"  as  depend 
partially  upon  the  element  of  time,  obviously  the  shorter 
the  ])eriod  involved  in  the  extraction  of  tlie  ore  the  bet- 
ter. The  introduction  of  increased  ef|uipmeiit  necessarily 
sliortcns  tile  time  of  extraction,  and  the  savinjjf  (and 
tiierefore  increased  profits),  which  can  he  thus  effected, 
amounts  nearly  to  the  whole  of  the  fixed  charf^es  over  the 
increased  toiinaj:je.  There  are  certain  inevitable  co- 
ordinate reductions  in  working;  expen.ses,  other  than  fixe;! 
ciiarq-es,  as  tlie  result  of  a  larger  volume  of  output. 
What  these  amounts  will  a^'gre^^ate,  in  increased  profits 
on  the  increased  tonnage,  depends  somewhat  on  the  pro- 
portion of  the  increased  volume  to  the  vohime  previously 
treated,  but  the  total  saving  on  the  increased  tonnape 
may  be  taken  in  mininnim  as  equal  to  tlie  fixed  charges. 
Also  the  profits  will  be  increased  by  liie  interest  earnings 


Ry  'amortization'  is  meant  the  recovery    of   capiial    invested 
with  accinmilatcd  interest  thereon. 


MICROCOPY    RESOLUTION    TEST    CHART 

ANSI  ond  ISO  TEST  CHART  No    2 


I.I 


'-IM  IIIIM 


III  2.2 

t  ^  IIIIM 
mil  1.8 


1.25 


1.4 


1.6 


^     APPLIED  I^A>^GE 


'653   Ea5t    Mom    Street 

'Rochester,    N»w    York         U609        USA 

.■''6)   4fl2  -  030Q  -  Phone 

!7!6)   288  -  5969  -  Fa. 


17.;  ////•;  /■.cO.\().l//c  .s  Ol-   .U/.V/.V('' 

,,;   ,1k.  cNira  I'l-Mln  takr,,  nut,  as  iKtweu,  ihc  oariur  tunc- 
it    vsnuM    iKuc   !-on    ,.ul    nu  ,    ^.rvuv   l.y    the   secondary 
o|uiim,cnt,  a.ul  il,.  later  tni,.  U  unuMh.  rdoasc,!  hy  the 
,„.niarv  u|Uii.i,um.      If  tin.  he  lalan  at  a  i.xcl  rat.'.   >a>_ 
4  iRT  cent  o.nipnuti.l  iiuvrosi,  it  then  lu-cni.-  a  factn,-  r,i 
,lu.  prnm   ,HT  inn   ..f  nrc.      A   innuT  a.Mitinn  al^-  an^cs 
fr,„n  thr  in.-iva.r.l  inlcrc.st-varnin-  nu   the  ^''^ter  pr-t.t 
.ccurol  lA    the  menace  .-f  r-mtil  ariMn-  fmni  the  savin- 
,,f  .^„  ,„„:„„„  ,,n,al  1..  hxe.l  ehaf.^e>.     We  may  eonsnii- 
,].„,.    all    these   a^hhtimis   to    prnlU.    as   the    result    nf   ex- 
pan.led  otitput  mf  onu-e  nnt  mehidin- the  ordinary jm.ht 
,,„  the  ore),  int..  tne  ..ne  phrasr  ■iner.nient  ..t  pr.'hts. 


ll(.\\   iniijortant   tins  •iiiereiiient  oi  \ 


.rntits'  nia\   hoe<'nie 


uil!  he  seen  hv  taking  a  leu  examples.  On  a  Inw-^ra-le 
,I,.p..sn.  vieUhn^^  a  profit  of  $_>  per  t..n,  iimler  C  ah- 
(,,rnia  eoiuUtions  of  t.xe.l  eliar.L;es  ol.  sa> .  .^nc.  per  ton, 
,„,  an  iiKrea.sed  n-nna^e  ..f  i5.o<xi  to.ns  per  annntn.  the  m- 
,.n,nenl  at  the  riu\  of  three  vears  uouM  amount  to  (n-er 
S.,M,o<..  With  a  mine  vul.hn-  a  protu  ol  Sio  per  ton 
under  Western  \ustrahan  eonditions  of  a  tised  ehar-e  of. 
,,v  -^e  per  ton.  the  mereinent  in  three  yi^ars  on  the 
.ame'iuerea>ed   tonna-e    would   a-gre-ate   over   $()5.ooo. 


The   rapidity   with   wliieli    tin 


s  iueremenl  of  protits  aceu- 


mulates  i,  a  more  deta.le.l  ,iemonstrati..n  oi  the  advauta.ge 
,,f  the  maximum  om,int,  and  it  is  also  a  demonstration  of 
the  neeessitv  f.ir  a  maximum  speed  of  devel..pment. 

The  v..hnue  (.f  these  savin-.s  is  ^.)  lar-e  as  to  render 
the  .|iiesti..ii  of  nistitie-atiou  of  iuereased  capital  expeu- 
.limic  f..r  their  reahzati..u  a  matter  oi  eas>  appn-aeli. 

(2)  Reduction  works,  and  subsi.liary  plant,  thereto, 
represent  lar-e  sums  ..f  capital,  and  such  plant,  are  either 
uc.rn  ..nt  or  h.o.me  valueless  throuuh  exliausti..n  ot  the 
niu-.e  Ihe  In  p.  thesis  that  the  cLulnni;-  oi  dead  mines  is 
xaluahle  vsas'l.-if^-  .nice  exploded,  allhoti-h,  tlu'  public 
se.metime.  s,,,,,.  n..l  t..  have  heanl  of  the  explo>i,.u.  in 
anv  eAeiit.  the  capital  mn.st  he  recvered   li-m  the  mnie, 


CAPACITY  AM)  ORE-RESERVES 


177 


with  conipnuiul  iiitcroi.  (luring;  tlic  lii'c  nf  thf  iiiinu 


Tl 


>t  (it  installatKni  vanes  with  the  locahtv,  character  of 


(irc,  etc. 
"'■1(1   mi 


hut  \\i-  niav   take  tl 


le  exai 


link 


n|   a 


Cahf 


ornian 


le  mi  the  (jiie  iiaiid,  where  e(|iuijnient  to  hariiile 
an  iiutpul  "if  i5,(;<)(i  tons  per  amiiini  wouhl  cost,  say.  $|S,- 
ooo,  amh  on  the  oilier  haiul,  a  \\  est  Australian  K"'''  mine, 

if  ore  hanclled  would  involve  an 

with    more    complex    treatment 

lie  (.'aliforniaii  plant,  with  4 


where  the  same  vi 


exjienditure    o 
a. id  1  thei 


f   $:;o 


ume 
000. 


causes  involved 


per  cent  compound  interest,  at  the  end  of  three  years, 
would  stand  in  at  ahout  $20,000;  antl  the  West  Australian 
plant  at  .ahnut  $57,000. 

es,  less  than  three  vears'  accumulation  of 


In  t 


nese  cas 


the  nicreiiient  nf  prohts  i>  ri.(|uireil  U>  amortize  the  entire 
capital   involved.     Viiven  an  in>tance  of  a   low-<:;ra(lo  ore 


and   a  iiisih   construction   C(!>1.   the   necessarv   time  wouh 


he  lonj^'er,  jjut  in  a  particular  case  which  has  come  under 
my  oliservatioii,  of  very  lii^h  profits  i)er  ton  of  ore  and 
mod 

18  months  was  sufficient  to  amortize  the  expenditure. 
(3)    .\t  the  time  of  jiroposed  c(|uipnient  the  life  of  a 


erate  installation  costs,  the  increment  of  ])rofits  over 


mine  o 


f   tl 


lis  class  I'-  .111   1111 


kiK 


fa'-tor.  Despite  this, 
however,  as  shown  above,  the  increment  of  profit  so  over- 
takes amortization  as  to   make  it    nec(>ssar\-  ti>  have  hut 


short  lif 


e  111  s 


ij;"ht  to  justify  the  capital  expenditure. 


A  certain  jjart  of  the  life  of  the  mine  is  tan,i;il)lv  visi 


hie 


in  Its  ore-reserves. 


I'lik 


<ler 


was  made  111  ini 


lial 


installation  (  nr  in  the  remote  case  of  .a  mine  fully  devel- 
oped hefiire  eiiui])iiu  iit  I .  llun  with  \iL:;oriius  (le\el"|iiiu'iit 
and   coiitiiuiity    in  depth   the  (ire-reser\-es  of  a   mine   will 


pain  on 


tile  t 


reatment  capacitv 


Th 


.■lin  will  eventualK 


re.'icli  ,1  p"int  where  the  visihle  life  iiecimies  e(|ual  tn  the 
period  at  which  increiueiit  of  ]irohts  overtakes  amortiza- 
tion. Sn  lor.L,'  as  the  rcsirvts  co.ntimie  to  1,^111  upon  the 
treatiiK'!it-i)!,-int.   aililitii)ii;d   unit^  shduld  he  erected   until 


tl 


le  must  vi"oriuK 


.■1,., 


iiiunt  1^  no  loTiLrer  ahle  to  more 


ITS 


Till-.   FCOXOMICS  OF  M!\IXo 


than  keep  pace  wiili  ilif  ..illicit.  N'  r  will  such  a  policy 
(.■mail  an  unn>ual  accuniulatidn  ni  orc-roscrvi-s  ;  in  must 
cases  it  will  he  imt  iimrc  than  a  three  vi'ars'  supi)ly.  Thus 
it  hecimus  (xissihle  tn  ileteriniite  ah^'lutely  the  vdiuiie  "f 
troainient-capacitv  without  any  sj)eculatiiin  as  U>  cnntin- 
uity  in  (k'lith.  That  it  is  an  ohlii^atinn  of  ^"'"1  i.iaiiaiji.'- 
meiit,  lo  set  up  a<lclilinnal  ireatinent-iuiits  whenever  in- 
creiuent  of  i)rofit  due  to  theiu  will  overtake  amortization, 

Is    ()l)\ioUS. 

It  seems  clear,  then,  tliat  the  maximum  profit  from  any 
mine  can  onlv  he  ohtained  In-  the  most  rapid  exhaustion 
nf  the  mine,  and  that  most  rapid  exliaustion  is  to  he  se- 
cured onlv  by  tlie  most  riijorous  prosecution  of  devel- 
opment and  the  m;i\iiuum  eciuipinent  which  can  he  em- 
ployed. ^■et  in  the  majorii}  of  mines  the  caution  of 
sound  Imsiness  m;uia,s;ement,  owiii!.,'  to  the  unknown  fac- 
tor of  contimiity  in  depth,  imiioses  limitations  upon  the 
extent  to  which  capital  should  he  invested  in  e(|uipmcnt, 
and  a  trenera!  rule  for  the  determination  of  the  size  of 
equipment  iiii,s,dit  he  framed  as  outlined  herewith: 

If  hv  vii;< irons  development  the  visible  life  of  the  mine, 
as  shown  bv  the  ore-reserves,  is  lenijthened  soas  to  exceed 
the  time  re(|niri'd  for  a  unit  of  trea'ment-caiiacity  to 
earn  an  amount  throticjh  the  increment  of  profits,  equal 
to  amortization  of  the  capital  invented  in  that  unit,  then 
the  installation  of  another  unit  becomes  not  only  justi- 
fiable, but  an  ol)li,Li;ation  of  ^ood  management. 

The  liconoiiiic  Limit  to  .li-ciiii!i(liitiou  of  Orc-Rrsci-:  t's. 
— This  subject  niay  ajipear  as  merely  a  pha-e  of  the  jire- 
cedinir,  and  a  natural  corollary  to  it.  We  have  a  limit 
bevond  which  the  increase  in  ore-rtserves  justifies  an  in- 
crease Ml  i)Iant-units;  in  other  words,  there  is  a  maximum 
reserve  which  it  is  .-HK-.-intaircous  to  have  in  a  mine 

It  has  been  su^'S^ested  that.  <:riven  a  dep<)sit  of  fairly  rep;- 
ular  continuity  in  depth,  an  accumulation  of  ore  reserves 
to  this  excessive  extent  means  a  certaiti  amount  of  locked- 


Cir.lCITV  .IXn  Okr.-RESERFES 


170 


up  iillo  profits,  and  that  this  profit  tni;,'ht  be  sccureil  with- 
out ovcT-ii|iiii)nicnt  if  the  luaiiageiiK-nt  took  the  risk  d 
inereasiui,'-  the  output  before  they  w  ■- '  wholly  justified 
bv  the  increase  in  reserves,  the  resr.lt  beinp  that  the 
same  niaxiiiiuiu  oulinit  eouM  be  maintained  withoui  the 
loss,  .\side  from  the  ri>k,  thert'  is  one  matter  of  L;ener,al 
polie\  in  the  coi^duet  of  a  mine  which  affects  the  case;  it 
m;i\-  be  expressed  thus : 

Kvery  deposit  of  the  character  U'^der  discussion  is  sure 
to  tjet  ])oorer  eventually  and  fail  at  some  point  in  depth. 
On  a  paviuij;'  mine,  failure  at  ;my  |.^iven  level  docs  not  mean 
the  abandonment  of  the  mine  at  that  point.  To  what 
<lepth  the  .search  for  ore  should  be  pursued  throu^'h  blank 
countrv  is  a  matter  of  local  judijment  based  on  the  char- 
acter oi  the  deposit  and  the  conditions  which  determine 
its  discontinuance.  That  this  work  should  be  pursued 
while  the  reduction  works  are  in  operation  is  a  sine  qua 
non  of  pood  inanap^ement.  Not  only  does  it  cost  less 
while  other  ojierations  are  in  propjress.  but  the  mine  is 
])rovitlin,<j  the  expenditure  recptired  to  do  it,  which  the 
owners  -AW  not  likely  to  do  afterwards.  Mines  are  diffi- 
cult to  kill  in  proportion  to  their  greatness;  the  more 
profitable  their  ])ast  career  the  deeper  will  their  im- 
protitable  e.x])loration  be  carried.  A  mine  with  an  ore- 
reserve  e(|ual  to  the  period  set  out  above  possesses  the 
sinews  t  ir  pursuit  in  depth  for  an  equal  period:  and  that 
peri :m1  will  probably  prove  sufficient  to  exhaust  reasonable 
hopes  and  to  prevent  the  premature  abandonment  of  pos- 
siblv  valuable  property.  As  a  matter  of  policy,  then,  I  be- 
lieve that  the  maximum  provided  as  above  should  form 
al.so  the   minimum. 

The  economic  and  advisable  ore-reserve,  therefore,  will 
be  e(|ual  in  volimie  to  the  animal  outpiU  multiplied  by  a 
number  of  ve;irs  just  under  tb.at  needed  bv  the  increment 
of  profits  to  e(|ualize  the  amortization  retpiired  to  con- 
struct  increased  treatment-units. 


EQUIPMENT  AND  ORE-RESERVES.— 1. 

(K'litonal,    March    J4,    lyi^.) 

We  take  particular  [)lcasurf  in  inil)lishin,Lr  an  article  by 
Mr.  11.  C  Hoover  on  so  important  a  matter  as  the  eco- 
nomic ratio  between  the  capacity  of  the  reduction  works 
of  a  mine  and  the  toniiaj;c  of  its  ore-reserves.  As  a  basis 
for  argument  Mr.  Hoover  has  assumed  the  existence  of  a 
plant,  and  procee<ls  therefrom  to  discuss  the  additions 
to  it  which  are  warrantetl  by  an  increase  in  the  amount 
of  ore  available  for  treatment.  There  are  thus  two  prob- 
Kms:  first,  what  size  of  mill  to  start  with,  and  then,  what 
additions  to  make  as  the  mine  j^rows. 

In  most  cases  the  plant  is  started  with  an  economic 
unit,  which  in  California  is  usually  a  40-stamp  mill,  while 
at  Johannesburg  it  is  a  200-stamp  mill.  We  do  not  know 
that  this  is  reasoned  ou^  further  than  that  the  capacity  is 
based  roughly  upon  the  amount  of  ore  which  can  be 
opened  up  in  the  course  of  ordinary  development ;  that 
is,  the  mill  is  expected  to  exhaust  the  existing  stoping 
area  about  as  fast  as  new  ore-reserves  are  opened  up,  so 
that  the  original  tonnage  available,  equivalent  to  a  two 
or  three  vears'  supply,  is  maintained  until  such  time  as 
development  is  unsuccessful,  and  the  mine  begins  to  show 
exhaustion",  then  the  reserves  in  hand  are  used  up  dur- 
ing a  further  period  of  exjjloratory  work.  A  mill  is  not 
erected  of  such  a  size  as  to  consume  all  the  ore  in  one 
year,  for  exami^le,  because  the  initial  supply  generally 
represents  the  result  of  several  years'  development,  and 
to  stai.  out  at  such  a  gait  would  shortly  end  in  the  neces- 
sity of  shutting  down  part  of  the  ])lant.  In  the  \\  est  it  is 
not  uncommon  to  base  the  mill  cajiacity  upon  the  amount 
of  ore  to  be  extracted  from  one  "lifi,'  that  is,  the  tonnage 
sto])ed  between  two  successive  le\els  mie  humlred  feet 
apart;  it  being  the  experience  that  to  open  U])  one  lower 
level  per   annum,   while  consuming  the   reserves   of  one 


EQUIPMI-.\r  ./AT)  OKP.-RF.SF.RIT.S        isj 


upper  Icvi'I,  represents  a  seale  nf  w.  irkiiii;  'vhich  is  coni- 
f(.)rtat)Ie.  llowi'ver.  in  nrtliiiary  vein  niiniiii,''  all  such 
methods  indicate  an  unspukeii  reCDj^mitioii  of  the  fact 
tliat  each  (lee])er  le\el  l)rin<.^s  tl;e  mine  nearer  to  the  hori- 
zon of  eventual  impo\erishmeiit,  while  on  the  Rand  the 
Hmit  sot  to  exploitation  hy  the  area  i>f  the  claims,  affords 
a  more  definitive  termination  to  the  winning;  of  ore. 

Ilavin<j  a  certain  e(|uipiuent  at  the  start  of  ojierations, 
what  addition  to  it  is  warranted  when  increased  ore-re- 
serves arc  created  in  the  course  of  successful  development? 
That  is  Mr.  Hoover's  (|Uistion.  which  he  himself  an- 
swers. It  can  be  stated  also  thus:  .\n  increase  in  tlic 
mill  is  justitied  when  the  --edeminion  of  the  capital  in- 
volved, plus  interest  upon  it.  can  he  more  than  balanced 
by  the  savinjj  in  cost,  or  hy  the  'increment  of  profit,"  uixin 
tlie  additional  tonnas:;;e  taken  from  new^  ore-reserves. 
The  subject  can  he  treated  liy  differential  calculus,  ami, 
from  a  mathematical  point  of  view,  it  mipjht  well  serve 
as  a  thesis  for  advanced  students  at  our  schools  of  mines. 
From  the  standpoint  of  financial  experience  and  practical 
mining,  it  affords  room  for  a  discussion  which  is  well 
worthy  of  the  best  consulting:  engineers  in  the  profession. 
We  commend  it  to  their  earnest  consideration. 


EQUIPMENT  AND  ORE-RESERVES— 11. 

I  l-.'!ii.rri,il.    Ainl    Ji,     i'r't> 

As  Vft  there  lias  lui'ii  i)iit  little  iliscussicni  of  tlie  iitter- 
estiii.LT  artiele  by  Mr.  II.  ('.  Hoover  on  tlie  subject  of  the 
jJHiper  ratio  of  mine  ei|iiipiiieiit  to  ore-reserves.     Mr.   ]' . 
(',.   S;iilsbiirv,  in  our  issue  of   Marcli  31.  and   Mr.   1'..  P>. 
Lawrence,  in  this  issue,  a!.;ree  in  their  opinion  that  Amer- 
ican iiiinins,'  rarelv  atTonls  conditions  warrantiiiLj  sucli  a 
nice  adjustment  between  the  abihty  of  the  mine  to  pro- 
(hice  ore  and  the  capacity  of  tlie  mill  to  consume  it.    ()\v- 
iniT  to  the  uncertainties  of  the  one  and  the  positiveness 
of  the  other,  it  seems,  from  their  point  of  view,  best  to 
err  on  the  safe  side  and  erect  treatment  plants   which  are 
well    under    the    probable    production.      A    manager,    of 
course,  likes  to  liave  somethinj^  ap  his  sleeve;    it  is  bet- 
ter from  his  standpoint  to  have  an  accumulating  ore-re- 
serve underground  than  to  hang  up  ten  or  twenty  stamps: 
he  would  ratiier  have  ore  lying  broken  in  the  stopes  than 
shut   down   a  part  of  the  cyanide  plant    for   lack  of  an 
ade(|uate  supply,     i'.ut.  as  a  matter  of  fact,  the  capacity 
of  the  initial  plant  is  usually  ahead  of  the  rate  of  tlevelop- 
nient ;  and  as  soon  as  there  is  evidence  that  the  two  ap- 
proach each  other,  the  owners  call  for  an  increase  in  the 
reduction  works,  because  they  want  to  rush  the  output. 
The  American  idea   is  to  secure  certain  and  immediate 
profits  at  the  expense  of  ultimate  ]iossible  economy.   While 
the  engineers  mav  appreciate  the  benefit  of  plans  which 
pur])ose  the  amortization  of  capital,  and  though  they  may 
be  fullv  awake  to  the  economy  of  a  jirtiper  balance  be- 
tween the  capacities  of  the  mine  and  mill,  they  are  brought 
abru])tlv  against  conditions  which  completely  uj)set  any 
logical  solution  of  the  problem.     The  owners  refuse  to 
take  a  far-sighted  view,  and  ])refer  a  jilan  of  operation 
which  results  in  immediate  profits:    therefore  the  man- 
ager has  to  adjust  his  point  of  view  to  theirs:   he  is  con- 


Il(jUIPMi:\T  .l.\n  ()Rli-RliSI:Hll-.S        is;! 

fnnitcd  l)v  a  condition,  nnt  a  tlu-nry.  and  ailoi)ts  a  i)i>!ic\ 
which  is  practical,  tliouj^h  short-si^lited,  wliich  liuj;s  the 
brutalities  of  fact  wliile  it  disrejj^ards  the  attractions  of 
svstcni;  it  is  the  inevitable  consequence  of  a  short-lived 
ownersiiip  of  mines. 

I'or,  l)ehin(i  all  the  arguments  for  and  against  an  en- 
lari^ed  mill-capacity  or  au  increase  in  mine  develi>i)ment. 
there  stands,  frank  and  unashamed,  the  essentially  Amer- 
ican idea,  that  it  is  a  p«K)r  business  to  work  for  posterity. 
•'What  has  [xisterity  done  for  us?"  the  cynic  asks.     "Let  us 
take  short  view.s  of  life— and  of  mining;  why  inaugurate 
a  policy  the  benefit  of  which  it  requires  years  to  work  out 
while  the  expense  of  it  burdens  the  present?"     In  this 
connection    'posterity'    means    successors    in    any    form, 
whether  they  be  shareholders,  who  five  years  hence  may 
have  acquired  the  holdings  of  the  present  j)roi)rietary.  or 
wliether   it   be   the   engineering   staff— general   manager, 
mine  superintendent  and  shift  bosses — who,  likely  enough, 
will  in  the  course  of  time,  or  with  change  of  control,  suc- 
ceed   the   existing   management.      Mines    get    bigger    or 
smaller;    people  make  as  much  money  by  selling  out  of 
them  as  by  buying  into  them  ;    there  is  a  healthy  growth 
or  a  steady  decadence ;  in  an  intensely  active  and  jnishing 
comnnuiity.  such  as  an  American   metal-mining  district, 
nothing  stands  still.     In  the  coal  regions  it  is  differr-n  ; 
fixity  of  ownership  is  more   prevalent  and  a  consistent 
policy   has  an  opportunity  to  justify  itself.     But  in  the 
West,  it  is  a  fact  that  the  control  of  mines  passes,  as  a 
rule,  in  less  than  five  years,  and  the  manager  is  changed 
on  an  average  about  every  two  years,  either  because  a 
i)etter  jHisition  is  ofTered  to  him,  or  because  a  better  man 
is  found  for  the  position,  or  for  any  one  of  the  several 
reasons    which   bring   about   new   af)pointments   to    such 
posts  of  responsibility. 

Tangible  profit  is  the  aim  of  the  .Xmerican  system,  or 
the  excuse  for  the  want  of  any  system ;    sometimes  that 


I>l 


////:  lAOxOMiiS  01  mix/m; 


nic;m.s  a  mill  uilli  ;i  caiJ.icitx  per  .inmnn  ciinal  !■>  tlic  ti'tal 
ore-rcstTVCs  :  smmtinirs  ii  nicaii-,  im  mi'l  at  all.  hiii  tlir 
disposal  lit  the  .uitpiit  t..  nisiMui  mills  aii.l  sm.liirs ; 
sdmctiiiiis  It  iiicaiis  IK.  mill  and  no  jirc  idiictinii.  Imi  nn  ial\' 
a   laapaiatiMii   ,.f  tin-  imiir    t'nr  a   sale:    m   i.uli   caM-  the 

nlijcc-t    I'l    vi(\\     Is    llu-    making;    k\    tlu'    lllnst    n|,,iu\     I, lit    of 

tlir  piiipirt\  111  the  sliciTtist  time.  Tlu'  iiu'tliDd  has  tlu- 
faults  (,i  its  \  inn, .. 

\\  hill'  tlir  tnr.odiiij.,'  is  hcliovcd  In  ri'iircsciit  ctirrcnt 
practici-  in  this  hranch  of  mininur  vc-i  .iicmiics.  wc  realize 
fully  that  there  is  a  lari^^e  numl)er  n\'  ua'll-urs^'ani/ed  min- 
ing' i)ropriet<iries  which  njierate  mines  with  no  view  X<  < 
exh.aiistiil.i,'  them  •■■v  l.i  sellini^  lliem  .  r  the  sh.ires  in  the 
companies  controllin--  them,  and  which  therefore  ailnpt  a 
system  in  which  aniorti/.ation  of  c;i[)ital  and  otlur  nice 
adjustments  are  ri'coL,nii/ed  factors.  Takint,'-  a  hroad 
view  of  minini;-  activity,  the  description  f,'iveti  ahove  will 
nevertheless  he  reco,L;-nized.  we  I)elieve,  by  those  who  are 
hest  intormed.  to  he  a  fair  statement  of  the  case,  the  dis- 
cussion of  which  i)resents  many  points  of  view. 

This  subject  is  <if  threat  ])ractic,il  importance  to  tlie 
business  of  ininiiit,^,  and  we  trust  that  some  of  our  ex- 
perienced enijitieers  will  use  our  columns  as  they  take  us 
into  their  confidence. 


EQUIPMENT  AiND  ORE-RESERVES.-III. 

(KililHri.il,     M.iv     5.     ,,,,,4  I 

T  Ih'  c.'innlmthJti  (.11  ilii-,  -ulijrrt  li>    .Mr.  \\  .  R.  In^alls 
uill  lif   rr.ul   uith   irtvriM.   f.  t  it   i,.  an  alilc   arKiuiuiit   in 
la\..r  ,,|  tlic  l.ij^ical  iicatniint  nf  tik   prMi.Kiii,     l.a>t  wxxk 
ur   .nii.lia->i/(.'<l   thai    ,,,[uvt   ni   n    an. in-    Huiii   tlk-   :,li(irl 
"uimsliip  ,,1  niiiK-.  in  .mr  \\  ott-rn  innmi.L;  it.uicjh^:   it  i.s 
a  view  of  till'  sulijcit  uhicli  uill  iin'\italil\   hicninc  niodi- 
fu'd  as  iiiiniii',-  is  |nit  cm  a  >niinil.  •  lia>i>.  hm  tliat  i»  is  tlie 
>■llaracton.^tic   .\nuruan   -tan(l|ini,a    uo  arc   cumpi'llcd   to 
e-onfuss.      'llu'    Inni.Ntnck    inTiM.l    (aillion,L;li    aci-diiii.anu-d 
l)y  manifcstaiiciis  nf  ^rcat   t.tRT-y,   iiiccliaiiical   rcsuiirce- 
fnlness  and  tlir  nunuinn  nf  in,L;vninn>  tnacliiiKTy  tn  meet 
nvw    (.■(>iiditinii>  )    ua-    nmrc    partuularly    remarkable    for 
the  rapid  exhaustion  of  hij;  bonanzas;  and  tlie  uastcful- 
ne>s  (if   tliat   jrreat    exploitation   afifected    injiiriouslv    the 
methods  of  an  entire  t;(.nerati(jn  nf  minini^   men  west  of 
the  Rocky  Monntains.     it   represented  an  Ainericaii  type, 
just  as  the  conservative,  unprn^rnssive  ways  of  h>eiber^\ 
for  example,  ts  pitied   luiropean   ideas  of  workinjj  out   a 
mine.     Hoth  extremes  are  wasteful  and  illn,-,rical ;  as  any 
serious  consideration  of  amortization  of  capital  and  pos- 
sible increment  of  [)rof^t  will  abundantly  prove.     In  Xew 
"^ork.  no  less  than  in  Ltjiidon,  new  ideas  are  dcvelopintr ; 
the    introduction   nf   business   acumen    into  the   erstwhile 
.yfamblinp  of  minini,^  tends  happilv  tn  elucidate  the  neces- 
sity for  treatinj:^  mininjT  undcrtakin.cfs  as  financial  enter- 
prises surrounded   by  conditions   invnlvinsj  some  of  the 
same  logical  reasoning  as  manufacturing. 

The  time  was,  not  long  ago,  when  English  investors  in 
mines  bought  shares  in  properties  the  value  of  which  was 
based  chiefly  on  their  past  production,  and  if  bv  chance 
they  got  an  annual  sixpenny  dividend,  accompanied  by 
S(K. thing  exiilanations  of  future  betterment,  they  went 
home  content  with  their  venture;  and   the   shares  would 


I  Si; 


nil:  LLUSOMlLS  Ul-  Ml.MSC 


.Slav  i-lnsc  to  till  ir  par  vahu'  nf  £i  until  cvciimally.  hut  iu- 
i.'vital)lv.  tlu'  I.  ■iiipaii)  uiiit  nil.i  lii|uiilatinu,  afuT  the 
>liar(  hiildti-  liail  ii..t  ..iil\  !■  i-i  tliiir  lapual.  Inu  liad  also 
rriiivi'd  a  >iiialki  raic  "i  mtiri.>t  tliaii  tluy  mii;lit  have 
ohtaiiifd  ilsi'wlkTi'.  I  )ri-ir«iTvt.'s,  i'(|iiivaUiit  In  a  year's 
pf  xhu'tic '11.  ut'i'i  >i)rt'ai|  (i\ir  tiwnr  six  yiars  DptTaliniis, 
tilt  iiiaiiaj^iT  and  staff  j^m  tluir  salaries,  tlie  direct' >rs  <.;(it 
tluir  fees,  and  in  tl:e  end  tlie  sharehnldiTs  'held  tlio 
lialiv,'  wlun  tliiise  uliii  were  res|»iTisil)le  |nr  it  had  cleared 
out  witlinut  apiilnos.  '\\i  that  era  sncceeded  the  tl  ilatioti 
nf  rich  mines  with  lar^^e  av.iilahle  reserves,  their  rapid 
ilei>letiiin  accnmiianied  hy  a  Imhiiu  in  the  shares,  the  accu- 
ninlatiiiii  nt  fnrtnnes  hv  clever  insiders,  the  speedy  ruin 
nf  tlinse  who  Ixiui^ht  at  top  prices,  a  enllapse,  a  nmral,  and 
fiiiallv  a  resuscitatinn  nf  the  inininj,^  cniiqiany  under  new 
niana,t,'enient.  It  is  nhvinus  that  it  the  ]iiihlic  are  wiriinj,^ 
tn  he  edu'  led,  indirectly  thrnu.i,di  tlu'  professinnal  men 
whnui  tliev  einplny,  tn  realize  the  fundamental  nrinciples 
(if  finance,  tlie\-  will  nhject  ;is  nnudi  tn  the  IniiLj  life  nf  a 
mine  which  means  the  swallnwini;  nf  (jml'its  in  general 
expenses  and  salaries,  as  tins  will  jjmtest  against  a  reck- 
less pouring  nut  nf  its  wealth  in  a  hrief  spi'll  of  inflated 
returns  which  is  accnmj)anie<l  hy  'in  and  nut'  selling  of 
shares  anmng  its  nwn  eiiiplnyees  and  such  tntal  lack  of 
ecnnnmv  in  the  management  as  is  iinvit.-iMe  wlun  mere 
rajiidity  of  nutput  is  the  aim  nf  all  o]h  rations,  witlmut  any 
reg.ard  for  the  future  nf  the  enterprise. 

i'oth  methods  are  seen  tn  he  destructive  of  mining  as  a 
respectahle  form  ni"  investment:  the  right  appreciation  of 
them  will  hring  Imnie  the  fact  that  the  magnitude  nf  the 
etjuipment.  with  its  comlhrv,  the  rate  nf  ]irn(luctinn,  must 
hear  some  logical  ratio  to  the  size  of  the  ore-reserves  and 
its  accompan_\itig  factor,  the  vigor  of  development. 


MINE  EQUIPMENT  AND  ORE-REShKVES 

Thr  r.dltor:  *""'''  "■  ""'" 

SiK— I  have  read  uitli  mucli  iiilinst  Mr.  Hoover's 
I)ap(T  on  'Tlu'  lAonoiiiic  Ratio  of  Treatiiui.t  (apacity 
to  (  •rc-Re.servf.s.'  Every  iiunil'ir  of  llic  proiV^^ion  who 
has  hc":;  I'-ult  in  [)ractice  knows  that  lliis  is  one  of  the 
11'  r.t  IrouhleM.iik-  i|iie-tion-,  lliat  lie  i^  lalKd  upon  to 
solve,  and  which,  ieavini;  out  tiie  small  ininoritv  of  ex- 
cei)tionally  favored  nnnes.  is  seldom  solved  satisfactorily. 
Theoretieally,  Mr.  Hoover's  deductions  m.iv  be  per- 
fectly correct,  hut  in  actual  jiractice  it  wnuM  he  verv 
flifficult  to  attemjit  t.»  apply  them  to  the  ^-cKTal  run  of 
minis,  as  ojitrated  m  this  cf)Uiitry. 

Ill  the  I'irst  iilace,  from  my  own  experience  I  can  safelv 
say  that  the  ore-treatment  i)laiit,  whether  millinfj.  con- 
ceiitratiiii.,'-,  smelting-,  or  other  reijuctioii  means,  of  over 
7^  \wr  cent  of  all  the  iiiiius  1  have  known,  is,  from  the 
initial  erection,  well  in  excess  of  the  output  of  the  mine, 
under  all  onlinary  conditions  of  develoiMue.it.  I'nder 
such  conihtioiis,  however,  a  property  is  perhajis  return- 
in;.,'  a  fair  ])rofit  in  addition  to  an  amorti/'atiou  fund  .jf 
say  5  jier  cent.  .\t  this  rate  <.i  extraction,  ami  with  rea- 
sonable development,  we  will  assume  that  a  two  vears' 
ore-reserve  of  the  average  value  can  be  maintained. 
Now,  supposing  it  were  decided  to  follow  Mr.  Hoover's 
suggestions  as  to  the  best  method  of  obtaining  the  great- 
est i)rofit  from  this  mine,  it  would  be  iiecessarv  to  in- 
crease the  devel(i])ment  expenses  many  tinus  what  they 
were  before,  (n  addition  to  this,  unless  the  development 
work  were  ;dl  in  ore.  the  hoisting  plant  would  jjrohahly 
be  over-ta.xed,  in  .getting  rid  of  the  waste  material.  All 
this  would  result  in  diminishing  the  immediate  distribu- 
tion of  jjrofits.  if.  indeed,  it  did  not  extinguish  them  al- 
together. 

Now.  having  by  these  means  developed  a  further  two 


ISS 


77//:  rx'oxoMics  or  .i//.\/.V(; 


(ir  lliri'i.-  \i';ii>'  n.'M.r\c'  ni  hit.  anil  i)n  ilialily  iiu'tn"n,'il  ihc 
(lis>ali.--i'actii  in  uf  all  the  -li 'cklii  iliUi>,  il  luci  imc'^  ik'ccs- 
sar\-  to  Imilil  ^ucli  an  adililion  tn  the  trtatnu'iH  plant  as 
will  ])v  rc(|i!i>ilc  tn  lakr  farr  i>\  tlii'-  iiKTi.a-i.il  priJiluc- 
linn.  I'fiitit>  ha\inL;  Ikiii  latcn  np  li\  tlii-  prrvinn-  extra 
ikAH'liipnu'nt.  the  patient  sti  ickln  iIiKt  is  I'itluT  reiinirnl 
tn  >iil)scril)t'  aililitinnal  capital  fnr  llu-  increase  nt  tlie 
plant,  nr  >ee  the  \alne  ni  hi--  linMinL;-  reihieeil  hy  the 
issue  ni'  nmre  stuck.  In  nlT,-et  this,  he  is  tnlil  tliat  the 
iiicri'ase  n|'  ca])acitv  will  ii'>nlt  in  Inwerin;.;-  the  cn>t  ni" 
]irn(hictinn.  This  is.  of  cnurr>e.  a  fact  :  hnt  will  nnt  that 
saviiiL;  in  i.;eneral  exjuiises  hi.'  n\er-halaiuH-i!  I)\  the  heavy 
charJ.;^'^  which  nnist.  in  justice,  he  ni.a<le  I'nr  the  anmrti/a- 
tinn  nf  the  cnst  i)f  tile  inci-c;i~eil  pl.int.  which  shuiiM  hi 
cninciilent  with  tlie  exh.anstinn  ni'  the  twn  nr  three  \ears' 
1  >re- •■eser\e>,  whicli  al'Mie  h.ax'e   instilieil  its  i.i\-ctinn.' 

1  think  it  is  selt-e\iilent  that  the  sti  ickhnlder  nf  such  a 
prnpert\  wnnkl.  at  tile  eiiil  nl"  the  \ears,  when  the  ;is- 
siimeil  riser\es  nf  ore  hail  hecn  exhausteil.  hi'  in  a  much 
better  tinancial  cnmliiinn  with  the  nriL,Hn.al  reiluctinn 
wnrks  nnl\  tli.ui  he  wmikl  hi.'  at  the  etui  nf  three  year.s 
with  the  e.\])an(le(l  capacity  anil  forceil  iinnluctinii. 

In  nearly  forty  years'  experience  I  ha\e  knnwii  iiianv 
mine  failures  due  In  a  tnn  threat  development  of  treat- 
ment ca])acity.  hut  ne\er  one  due  to  jirepnuder.ance  of 
mine  caiiacitx   n\er  th.'U  nf  the  reiluctinn  works. 

W  i-  are  ,ill  too  prone  to  discount  the  ])ossihiIities  of  a 
mine's  resources,  and  i)rep;ire  our  surface  works  to  meet 
the  ni|uirements  of  tlu"-e  po>.vihi!itics  ;  and  while,  theo- 
reticalU.  the  expansion  of  the  treatment  plant  >-h,  mid 
keep  p.aci.'  with  tlu-  mine  development,  it  is  m'nerallv  in 
]ir;ielice  tuore  protuahle  to  the  invistor  wiien  the  opposite 

"'^"'t^'"*-  E.  GvDUux  Si']Lsi;t.-KV. 


MINE  EQUIPMENT  ANL.  ORE-RESERVES 

(AlTil    ;i,    ii)i>4,i 

The  liditur: 

Sir — Mr.  1  Idovc-r's  papiT  (.11  "'I'he  I'A-nnomic  Ratio  of 
'lix'atiiK'iit  L'viijacity  ic.i  (  )rc-Kis(.'rvcs'  upcii  which  you 
]i:i\c  iiuitc'd  rruici^m,  ha>  ri'ct.i\  rd  ni\  carcl'ul  cniisidcra- 
tinn.  1  iiavc  also  road  with  inlcrest  ynur  cditurial  ui)oii 
ihi'  suhji.ci  ni  ■  [■".iniipiiR'nt  and  (  )rc-i';csi'rv^.' 

In  ni\  c-xpcriiiuT  in  prc-cious  metal  iniiiinL;"  in  tlic 
I'nitcd  Stales  it  i>  llu'  exccptinn  In  tind  a  mine  which 
>h('\\>  anything;  hke  the  1  ire-reserve>  nece^>ar\  Id  earrv 
lint  any  sucli  plan  as  sii,i;'.L,n'sled  li\  Mr.  Ilotiver.  [  inii:;ht 
venture  to  say  tliat  tiiere  are  verv  few  mines,  unless  thev 
are  for  sale  (or  fixed  up  for  a  sale)  which  ha\e  au\'  suh- 
stantial  nre-r(.'ser\is  ahead  to  luaMe  nne  to  think  of 
'amortization'  or  'nurement  of  p.ofits.'  These  term>, 
it  seems  to  me,  are  all  rii:;-ht  in  the  manufacturiuL;  husi- 
uess,  hut  I  doiil)t  very  much  tlie  wisdom  nf  usiny^  them 
in  regard  to  jirecinus  metal  niiniui.,''.  I  land-to-nn  lUth 
methods  are  the  rule,  and  we  must  uufortunaleK  adapt 
ourselves,  our  plans,  etc.,  tn  cnnditious  as  thev  exist. 

I  noiic'  th.at  ynu  are  cihli^'d  in  a  footnote  ti/  ex])lain 
to  ynur  readers  the  meaniuL;  nf  ';imc:niz;uii)u.'  This  in 
my  case — I  hltish  to  c  mfess  it— was  nmst  nece>sar\ ,  as  I 
ha\e  ne\er  had  nc  .ision  to  use  this  term  in  the  everv-dav 
l)usiness  uf  mining;.  .Mr  llnover  sa\s  that  "the  incre- 
ment iif  jirotit^  f(ir  iS  miiuths  was  sufficient  to  amortize 
till-  exiienditun."  \\  hv  nut  -.-iv  'nff-et'  the  expenditure' 
<  'f  cmirsi'  [  sli,ill  hriuLT  <liiwn  on  m\  head  a  st'vere  criti- 
cism ,-is  to  the  \iews  which  I  h,i\e  exjiressed  in  re.i^anl 
to  Mr.  llo(i\er's  ;irlicle:  hut  it  (iocs  not  seem  to  me  clear, 
nor  Odes  it  ;ippe,-d  to  my  common  -ensi',  as  apjilied  to 
prt'cious  metal  miniiiL;    in   this  coun!r\', 

Ih.Xi,  V<.  Lawki:.\ce. 
.\ew   ^'llrk,  .\pril  S.  1(104, 


ANOTHER  ASPECT  OF  MINING  FINANCE 


Tin-  liditor: 

Sin — N'our  inti.Trslin)j:  articks  rocoiitly  on  'Snnu'  As- 
jn'clMii  MiniiiL:  liiKuu-t.',' in  ni\  iuil,L;iiK'nt,  fail  tn  illu>tratt.' 
tin-  lati."^t  l'.n_uli>h  ilfvi'ldimu'iit  nf  the  suhjci't.  <  )ut  nf 
till-  chaiis  111'  mine  prnnidters.  titiance  ami  explnratinii 
c(ini]ianiis  there  has  recently  a])i)eare<l  entirel\-  andilkr 
fcirni  I  if  mining-  tnianee  ami  management.  There  are 
certain  firms,  comiioseil  of  jiartners — not  companies — 
who.  for  reasons  which  will  become  apparent  later,  liavc 
steadilv  come  forward  in  the  past  ten  years,  ami  are  fast 
controlliiif,'  the  <,reat  Inilk  of  ininintj  enterprise.  These 
tirms  have  risen  in  various  wavs  :  some  at  first  ori,c:inall\ 
merchants,  ami  some  miniiiL;'  engineers.  They  are  com- 
jioseil  of  various  partners:  financial  men.  minini;"  en- 
f^Miu'ers,  mine  iiianaLi^ers  :  in  an\'  e\eiit,  all  are  experieiUH'd 
iiiiniui,'^  men.  devotiiii^  their  entire  time  to  the  work.  1  he 
business  is  jjfenerally  organized  on  manai^erial  lines.  .\ 
central  exploration  conijiany  is  U'-ually  created  amons.^ 
their  friends,  when  aii\'  particular  field  is  to  be  covered,  a 
portion  of  whose  capital  tlu'V  may  or  may  not  own.  The 
'firm'  manages  this  comp;m\.  in  return  for  a  portion  of 
the  })rofits.  'i'his  exploration  company  searches  for  luines 
under  iruidance  of  the  tirm.  .md  timlinij^  them.  ]iroceeils 
to  develui:.  erpiip.  and  create  them  into  subsidiary  com- 
panies, which  are  in  turn  inanaLred  or  controlled  by  the 
firm;  sometimes  for  a  iiortion  of  their  pirofits,  sometimes 
for  direct  fees.  Whatever  the  details  of  internal  arrani;e- 
ment  m;iv  be,  from  the  standpoint  of  tlie  investor  and 
outside  en!.;ineer,  the  result  is  the  same,  and  there  are 
three  or  four  features  of  this  development  that  are  worthy 
of  note. 

I.   The  position  of  a  hoard  of  directors  sinks  into  the 


MiMXc;  i-i.\\i.\cn 


I'.tl 


t)ackt,'-r(nin(I,  for  the  clients  I'f  t'lo  tlnn  hnd  tlic  cajiital 
for  its  ciitiTpriscs,  and  tlicsf  cliunts  look  on  tlu'  tirin  as 
resi)onsil)lc ;  cii^a  the  firm  usually  tills  the  bua'-d  with  its 
own  partners,  or  men  of  its  'grouix'  whn  \\;1I  L;uard 
their  responsiliilities  ])ro])erly  from  a  directorial  stand 
point.  Scandals  from  mismanai,fement  h\-  directors  have 
been  of  rarest  occurrence  in  these  ,L;roups.  IkiiIi  liecau-/ 
of  the  domination  of  the  firm,  and  from  the  pcrsouucl 
forminrj  tlio  boards. 

2.  The  administrations  of  the  mines  are  of  very  supe- 
rior order.  These  firms  usually  confine  their  operations 
to  specific  retjions.  and  the  administrations  of  several 
mines  arc  usually  t,'roupe(l  to.yether  mider  a  staff  of  s])e- 
cialists,  such  as  no  sin^'le  mine  couid  afford  to  emplo\-. 
Sujjplies  are  l)oUL,dit  in  very  larii^e  bulk.  i!irect  from  manu 
facturers.  and  London  expenses,  by  combined  offices,  .ire 
k  pt  at  a  very  low  fiu;iire.  The  (|uality  of  men  emploved 
as  mana.irers  and  en;;ineers  in  these  L^roups  is  usually  of 
a  su^ierior  ordiT,  because,  with  a  ^reat  staff,  invalu- 
able o])i)ortmiit\-  for  comjtarative  results  arises,  and  the 
best  man  is  rajiidly  broui^ht  forward,  'Workint;  costs 
well  balanced  by  extraction  ar.d  workinij  results"  is  the 
watclnvord  of  administration. 

3.  The  position  of  eii}.^ineers  and  tuanaLTcrs  in  such 
groups  is  much  better  than  that  of  those  emplo\ed  in 
sin.t,de  companies,  which  are  usually  domin.ited  bv  boards 
of  titled  nonentities,  or  worse. 

As  the  manai;er  or  cnLjineer  with  these  firms  is  ni't 
dependent  upon  the  success  of  an\'  one  luine  for  his  fu- 
turi — for  "i^rood  mines  do  nut  make  L^ood  manaijers" — 
under  this  form  of  administration,  the  opportunities  of 
promotion  are  much  wider,  and  constant  <niplovment 
more  certain,  for  the  fiekl  is  not  limitid,  as  saiii.  to  one 
mine.  <  >tlier  lars;er  mines,  st.iff  positions  ;uid  ultiniatelv 
partnership,  are  steps  directly  >  ipen  to  a  capal)le  man. 

4.  Firms   I'i  thi'^   characiir  lia\e   a   name   to   maintain. 


!!):; 


77//:  I:C().\()M1CS  ()!■  Mf.M.W: 


f'lr  nil  tlu-ir  u 1  naiiir  din-s  ilu'ir  al)ilit\  i1i'[h'i1(1  to  si'ciirc 

'he  vast  Miius  of  iii«iiK-y  which  thoy  (.■iiiplny,  ami  thcv  arc 
iK'Vor  jj;uihv  nf  undrrtakiiiL;  'wn  nu'  \rn!iiri.>.  At  tiiiir^ 
I'vcn,  whi'ii  till'  failnrr  of  iiiino  in  ikptli  precipitates  a 
loss,  thev  ha\e  supplie(|  a  new  mine  at  their  nwii  cost  — 
not  for  charit\.  hut  to  keep  alive  the  necessary  contiiletice 
in  their  aliility  and  intei;rit_\. 

The  irrespoiisihle  promoter,  who  puts  up  a  dunini\ 
hoard  of  pompous  dii;nitaries  until  iiis  sliares  are  dis- 
]josed  of,  is  having'  .^reat  dilticulty  to  j^i't  the  inihlic  ear, 
and  must  disajipear.  'I'hese  same  jionipoi's  di.u^nitaries 
.are  a  sore  trial  to  the  honest  inan;iu;er.  who  slaves  at  the 
mine  o\er  working;  costs,  ami  periodicallv  meets  their 
in(|uiries  wliv  he  does  not  increase  iirofits  by  raisinij 
the  ;niiount  of  ijold  jier  ton.  instead  of  tr\  in:.;  to  reduce 
costs. 

.\  feature  of  this  form  of  orL;;iiii/:ation  whicli  is  niakiiiL; 
itself  felt  is  the  continuit}  of  the  tirm.  its  senior  partners 
retire  and  \ounL;er  nun  are  hrouL^ht  from  administrative 
posiiioiis  in  the  ticid.  and  the  Ihni  .t;ocs  on.  Transitory 
traiisaciii  Ills  for  min;cdiati'  pri  lit.  at  the  ri~k  of  L;(iod 
name,  are  not  iiidtilL;ed  in.  for  the  name  must  he  sus- 
tained. 'Idle  investini;  ]uililic  is  fast  recoL;iiizini;  this,  ami 
the  universal  preliminary  amoiii;'  investors  is  a  statement 
re^ardini;  .a  mine,  that  is,  that  it  is  a  1\.  (i.  \'  P..  niiiu'. 
and  not   ih.at   Admiral  Sir   IXimfunny  is  chairinan. 

There  is  a  marked  tendency  .amoiii;"  thcsC  tirnis  to  ter- 
ritorialize, that  is,  to  conline  tlieniseK>.'s  to  specilic  re- 
L,Moiis.  In  m;in\  instances  the\  are  interesled  in  concerns 
which  they  do  not  control,  ddiere  are  in  l.ondiMi  seven 
or  ei-lit  siich  llriiis  cif  proiiiinenct'.  Souih  Africa  fur- 
nishing: the  tleld  for  most,  ddie  leadinj;  tirnis  in  the  four 
])riiicipal  mining;  regions  in  which  h".nL;lishmen  are  mostly 
concerned  .in-  iiuiiiioucd  heiow,  with  ;ni  .ipproxiniation 
of  the  iioininal  capital  and  market  \-,ilue  of  tlu-  enter- 
prises tliex    control   or  manaLje.       The  memhers  oi    these 


MIX/XG  J-IX,1XCE 


VY.\ 


firms  are  often,  as  said,  iiitorosted  in  other  concerns  ;  onh 
tliMse  identified  with  the  firms  are  included: 

Rtgion  of  N,.inin,il  Markit 

rriiici|.al  Activity.  Ca|iu;il.  \';ilm- 

UltiiIrt,  B.'it  &  Co South  Afric;i.     $85,500x00     $,UJ,oixi,ooo 

Bewick,  M(.ri'ni>;  &  Co.  .  .    .-Xiistrali.!.  4.',ioo,oon        ;o. 5:0, 000 

John    l.-iylor  iS.-  Son, huli.i.  cto  30.500,000         ()5.50o,ooo 

rarbut,  Sof.  &  JaiiM'ii..,,   Wost  Africa 

iiui  Kiio(lc>ia.     55.500.000         ^5. 100.000 
rile   market  price    for  these   enterjirises,   as   compared 
with  their  nominal  capital,  gives  food   for  thought. 

There  are  in  London,  as  set  out  in  your  articles,  sev- 
eral exploration  and  nuance  coiupanies  which  are  not 
controlled  by  such  firms.  .\t  one  time  they  predominated 
in  the  mining  finance  of  London.  Some  have  been  man- 
aged with  consideration  for  the  public,  and  many  not  so. 
in  all  cases,  practically,  they  are  tlotatit)n  comi)anies  [Hire 
and  simple.  When  a  mine  is  fioated.  so  long  as  thev 
maintain  in  it  a  considerable  interest,  thev  continue  to 
look  after  the  mine  and  guide  its  management,  but  as 
soon  as  the  mine  is  in  the  liaiids  of  the  public,  they 
promptly  forget  it  for  other  matters,  and  the  administra- 
tion goes  to  the  dogs.  Hence  the  investor  has  begun  to 
consider  somewhat,  not  only  the  character  of  investments 
otYereil  him,  but  also  whether  he  will  need  to  'carry  the 
baby'  all  alone  or  not. 

;Ti  general,  in  the  finance-company  arrangement,  set 
out  so  mucli  in  detail  in  your  columns,  the  ultimate  ten- 
dency is  even  worse  than  with  the  individual  jiromoter.  for 
the  latter  has  at  least  some  mora!  responsibilitv.  and  a 
corporation  has  none,  '{"be  general  result  is  that  the 
'firm'  is  rapidly  becoming  the  main  source  of  mine 
finance — and  so  much  the  better  for  the  industr\ .  There 
is  no  finance  comi^auv  in  London  the  ventures  of  which 
in  the  aggre.gate  stand  on  the  market  at  an  amount  ef|ua! 
to  their  nominal  capital — itself  a  usetul  indication  of  pre- 

\iiiiis  career.  „ 

Observer. 

London.  ,\pri!  13,  1004. 


THE    ECONOMIC   RATiO  OF  TREATMENT 
CAPACITY  TO  ORE-RESERVES 

The  Editor:  (^'•^>-  5.  "'.m.) 

SiK — Mr.  Hoover  is  apiiaroiitly  tlie  firs':  to  express  in 
the  form  of  a  scientific  );eneralizalion  a  princijile  tliat 
has  heen  well  recoj^niized  1)\  engineers  as  soinid  in  theory  ; 
also  as  true  and  praiseworthy  in  practice,  subject  to  limi- 
tations, which  it  seems  to  me  Mr.  Hoover  clearly  referred 
to,  and  thus  (Hsarmed  the  criticisms  of  Mr.  .Spilsbury  and 
Mr.  Lawrence.  The  princii>le  is  briefly:  The  more 
quickly  the  values  of  a  mine  can  he  realized,  tlie  lartjer 
will  be  the  net  profit.  .V  practical  limitation  of  this  prin- 
ciple is  the  uncertainty  as  to  the  ultimate  resources  of 
the  mine,  involving  hazard  in  the  provi.sion  of  ore-treat- 
ment capacity.  Mr.  Hoover's  purpose  is  simply  to  for- 
mulate general  rules  indicating  when  there  is  no  hazard, 
buL,  on  the  contrary,  the  probability  ot  increased  profit 
in  the  investment  in  additional  plant.  Tliere  is,  however, 
another  limitation  in  many  cases,  which  Mr.  Hoover  has 
not  considered,  because  I  c  >nceive  he  has  gold  mines 
especially  in  mind  :  that  is,  the  limitation  of  the  markets. 

In  opposition  to  Messrs.  Spilsbury  and  Lawrence,  I 
fail  to  see,  Mr.  Lditor,  wherein  .American  conditions 
differ  from  those  of  other  countries  in  so  far  as  the  ore 
dei)osits  are  concerned.  All  have  ore  deposits  of  various 
kinds;  some  small,  pockety  and  uncertain;  others  large, 
regular  and  persistent.  Uur  .American  conditions  differ 
perhaps  from  tho.se  of  some  other  countries  in  affording 
better  public  markets  for  the  ores,  relieving  the  miner 
from  providing  any  treatiiunt  capacity,  permitting  him 
to  sell  as  much  ore  as  he  can  extract,  and  enabling  the 
intense  operation  of  his  property,  doing  in  fact  the  very 
thing  that  Mr.  Hoover  advises;  hence  the  short  life  uf 
manv  of  our  mines.  There  are,  however,  many  mines  in 
America  which  require  individual  plants  of  one  kind  or 


C.U'.IC/TV  .l\D  UA'/:-A7:.S7:A'/7:-.V 


liC) 


aiKitlier.  That  soiiio  of  tlicsc,  nay  ^•\■i^u  many,  liavc  hwu 
provided  with  an  nnprofitahle  excess  of  treatment  capac- 
ity (of  whicli  we  all  Jsnow  a  multitnde  of  instances, 
and  doniitlcss  'here  are  pniportiiinatelv  as  many  in 
Australia  anrl  elsewhere)  does  not  disjjpove  the  correct- 
ness of  the  principle  that  Mr.  Ih.over  formulates.  How 
can  it  be  said  that  this  is  a  i)rinciple  that  is  true  eiiout,di 
m  theory,  I)ut  of  little  practical  application  in  a  country 
which  pos.sesses  copjier  mines  showin.t;  the  ore-reserves 
of  Lake  .^u()erior,  Ihitte.  I!inj,diam.  and  the  various  <lis- 
tncts  of  .Arizona:  lead  mines  showinj.,'-  the  ore-r.>erves 
of  tlie  Geur  d'.Meiie,  lioime  Terre,  Flat  River  and  I'ark 
City:  zinc  mints  like  tho.se  at  Stirlinjj:  Hill  and  I'ranklin 
Furnace;  and  j.;()ld  mines  'ike  the  Hoiuestake  and  the 
proup  on  Dou.q-Ias  Island,  .Alaska?  I  have  seen  mines 
which  have  had  an  excess  of  treatment  capacity;  I  liave 
also  seen  tliose  which  have  had  a  deficiency. 

Take  for  example  a  very  wet  mine,  i)roducin,s^  150,000 
tons  of  ore  per  annum,  the  cost  of  pumpinj,^  water  heinjr 
$.:io.ooo  per  annum.  The  estimated  life  of  the  mine  is  in 
excess  of  10  years.  Tiie  extra  cost  of  plant  to  permit 
the  production  of  300,000  tons  per  annum  wt)uld  he  $100,- 
000.  The  savin.q:  in  cost  of  liftini,'  water  per  ton  of  ore 
would  alone  re-imhurse  the  cost  of  addition  at  jjjant  in 
ahout  four  years,  at  compound  interest,  not  to  speak  of 
other  savin,<Ts  that  would  ensue.  This  case  is  entirely 
analo,<Tous  to  those  which  Mr.  Hoover  cites.  .Another 
method  of  illustratint,'-  the  idea  is  afforded  in  the  experi- 
ence in  numerous  districts  in  the  L'nited  States  where 
larj^a-  bodies  of  low-jjrade  ore  are  mined  ;  a  mine  worked 
on  the  basis  of  1,000  tons  per  day  may  be  profitable;  on 
the  basis  of  kxo  tons  per  da\-  not  so.  Is  not  tliis  prin- 
cij)le  entirelv  in  accordance  with  tiie  .American  idea  that 
it  is  poor  business  to  mine  for  pcjsteritv? 

I  do  no.t  consider  that   this  discussion   is  sui)i)osed  to 
cover  the  policy  of  the   iiolder  of  a   short   lease,   whose 


VM  THE  r.COXO. MIL'S  Of  MIMXG 

interest  iiKiv  he  distinctly  to  i^M  a  mine;  or  that  of  a  for- 
tunate adveiiiurer  who  may  find  it  most  profitable  to  pick 
the  eyes  ..nt  of  his  mine;    hut  rather  to  the  policy  of  the 
operator,  wln>  has  probably  purchased  the  mine  on  ton- 
nage,  assays  and    prosiKCti,   and    ha>    paid    for   the    low 
as  well  as 'the  higli-grade  ore.     When  money  is  invested 
in  the  purchase  of  a  mine  it  has  P't  ''^  «-'^rn  a  .livi.lend 
commensurate    with    the    risk,    and    it    also    must    he    re- 
funded, else  there  is  no  prey..     The  more  (piickly   the 
principal  can  be  refunded,  the  greater  will  be  the  proht, 
because  $10,000,000  in  value  that  can  be  realized  in    10 
years  is  worth  more  as  a  purchase  than  $io,cxx),ooo  that 
can  onlv  be  realized  in  40  years.     .Amortization  of  the 
principal    is    therefore    a    very    important    consideration. 
Amortization,  which  is  a  term  more  used  by  I'.ritish  and 
French  engineers  than  .\nierican,  is  a  very  good  word; 
there  is   no  other  single   word   which   precisely   conveys 
tlie  same  meaning. 

Let  us  take  the  case  of  a  mine  sol<l  for  $500,000,  which 
was  supposed  to  contain  at  lea  •    j^.(Xxx(X)0  tons  of  ore. 
The  mining  and  milling  plant  rciuired  to  produce   I,0(X) 
tons  of  ore  per  day    1300,000  tons   per   annum)    would 
have  cost  $^or„ooo.     The  profit  per  annum  would  have 
been  $213,750  i  71. -'5^^  \>^^  ^on  of  ore),  which  would  have 
been  nearly  27  per  cent  on  the  investment.     Instead  of 
this,  the  mine    was  eiiuiiiped   to   mill   only   one-third  as 
much  ore,  though  it  was  already  developed  to  twice  as 
much  capacitv,  the  total  cost  of  development  and  eciuip- 
ment  being  about  $100,000.     The  profit  per  annum  was 
about  $5(>._'50  (56.25c.  per  ton),  which  was  only  lo  per 
cent  on"  the  investment,  or  only  sufficient  to  rc-imburse 
the  latter  in    10  \ears.  without  interest.      I'y  selecting  a 
better   grade  of  ore  than   the   average,   which   ihc   mine 
was  opened  sufticiently  'o  permit,  there  was  a  gross  im.fit 
of  about  $100,000  per  annum,  or  a  little  less  than  18  per 

111  1,1*-,    _„.,;,]    .1 V- ii-i ii..t !( Ill 


CAPACITY  AXn  ORR-RI'.SEh'rES 


197 


ol  the  iiiiiH',  leaving  sicat  bodies  of  ore  too  low  in  parade 
to  be  mined,  with  tlie  prospect  of  doin.i:  no  more  than 
rcturninp  the  money  invested,  without  interest.  Opera- 
tion of  tlie  mine  on  the  basis  of  l.(  -o  tons  per  day  prom- 
ised in  lo  years  a  profit  of  $j,i37,500,  whicli  would  have 
refunded  the  original  investment  al  the  rate  of  lO  per 
cent,  with  interest  at  6  per  cent,  and  would  have  left  a 
surplus  of  $1,07.^500,  or  an  average  of  nearly  13.5  per 
cent  per  aniunn  as  profit  on  tlie  investment.  Can  there 
be  anv  doubt  that  this  mine,  if  originally  opened  in  a 
small  showing  of  rich  ore,  and  provided  with  small  equip- 
ment, should,  when  development  indicated  the  true  con- 
dition, have  promptly  been  provided  with  increased  fa- 
cilities? 

Another  case  in  the  same  line  occurs  In  the  handling 
of  deposits  of  rich  ore  in  connection  with  large  deposits 
of  poor  ore.  .\  certain  mine  was  producing  100  tons 
per  day  of  smelting  ore  at  a  cost  of  $_>  per  ton.  of  which 
^00.  per  ton  was  for  pumping  water  and  general  ex- 
pt_.,)sc— administration,  supervision,  assaying,  surveying, 
taxes,  insurance,  etc. ;  and  100  tons  per  day  of  low-grade 
ore,  which  was  concentrated  in  a  mill— cost  about  $25,- 
000— to  10  tons  of  product  netting  about  37.5c.  per  ton 
of  crude  ore,  the  latter  being  charged  only  with  its  di- 
rect expenses.  The  high-grade  and  low-grade  ores  were 
known  to  exist  in  the  ratio  of  1:3.  but  were  being  ex- 
tracted in  the  ratio  of  only  I  :i.  Obviously,  the  result  of 
this  policy  was  to  leave  50  per  cent  of  the  ore,  all  low 
grade,  in  the  mine  in  a  form  wherein  it  could  not  be  ex- 
tracted at  any  profit  at  all.  a  contingency  that  was  pointed 
out  by  tlie  engineers. 

These  examples  are  from  practice,  hut  as  they  refer  to 
the  private  business  of  close  corporations,  the  details 
have  not  been  entered  into  and  the  figures  have  been 
generalized,  the  object  being  simpl>  to  illustrate  the  prin- 
ciple which  Mr,   Hoover  argues;    that  when  the  incre- 


HIS 


■////■.  liCOXOMK  S  Of   MIMX(- 


iiK'iil  ni"  proiit    ■xcfi'il'-  till'  cost  of  aiMitiniial   plant,  I'X- 
tciisKui  111  tlic  laltiT  -li'iiild  ho  mailc. 

1  havt'  jiruviously  rvmarkcd  ihv  liiiiitaticin  that  may  1)-. 
\]\c<\  hv   market  cniiditidns.     l'''ir  i'xami>l'.',  if  tlu-  entire 
iiiarkfl   for  a  cniunn "lit>   W  ^upiihnl  hv  a  sini^lo  urc  (K-- 
l)(»it.  no  matter  how  extensive  the  deposit  mav  he  known 
to  he,   its  exploitation    is  limited  l)y  the  capacity  of  the 
market      This  is  not  at  all  a  supiMisitilious  example.     I 
fancv  this  consideration  enters  into  the  calculation  of  tlie 
manaj,,'ers  of  some  of  our  ^rcat  mines,  and  it  is  vveii,dify, 
else  win-  the  agreements  to  limit  prodnction  tliat  m  one 
wav  or  another,  ;it  one  time  or  another,  have  been  made 
in  almost  all  of  the  .!;reat  met.al  indnstries,  pold  and  silver 
exrei)te<!:-     The  Calnmet  &  Ilecia  mines  are  snpposed  to 
have  ;.   further  life  of  J5  vears  .at  their  present   rate  ot 
production  ;   the  other  i,'reat  copper  mines  also  have  jjrcat 
ore-reserves;    hut    su]ipnse    the    dozen    lar.L;e    producers, 
who  make  approximately  50  per  cent  of  the  world's  out- 
put,  should,  at   one  and  the   same   time,  enter   upon   the 
policy  of  intense  production,  the  effect  upon  the  price  of 
copper  would  immediately  he  manifest— and  the  diminu- 
tion   in    value    would    proliahly    wipe   out    forthwith    the 
entire   increment    of   profit.      It   appears,   therefore,  that 
while  the  theory  of  intense  iiroduction  is  correct,  and  the 
results  of  practice  may  correspond,  subject  to  limitat-nns. 
it   is  rather   fortunate  that  the  practice  is  not   p;cnerally 
followed.  a,tjain  excludiii','-  i;old  mininj;-. 

I'.efore  concluding  tlii-  rather  lentjthy  contribution, 
reference  may  well  be  niaile  to  a  new  condifon  m  ore 
treatment,  which  is  developiiiL,'-  in  the  United  States. 
Many  vears  as^'o  it  was  a  common  ])ractice  to  put  reduc- 
tion works  at  the  mines.  Later.  pul)lic  works  were  estab- 
lished at  central  points  to  buy  ami  treat  the  ores  from 
many  mines.  Xow  it  is  af,'ain  becoiniivj:  common  for  the 
preat  mines  to  have  tl-.eir  <iwn  reilnction  works,  but  they 
are  bein,^'  pm  at  central  points,  and  are  intended  to  buy 


C.W.ICITY  AXI>  OFr.-Rr.Sr.RJTS 


100 


aii'l  tnat  tlic  ores  from  ntlur  iiime-;.  The  olTcct  of  tins 
i^  to  accomplish  all  that  Mr.  Hoover  ari^iies  for,  ami 
uith(>iit  so  miu-h  risk  to  the  individual  mine.  In  fact, 
the  ore-rednciion  hii-iness  may  i,'o  on,  and  the  wnrks 
still  have  value  as  a  m.-nnifactiirint:  plant,  after  the  mine 
for  which  they  were  primarily  erected  has  hecn  entirely 
exhausted.  \V.  R.   I.n-(;.\lls. 

I'.oston,  Mass.,  .April  J5.  i')04. 


H     ♦ 


MINING   IN    RHODESIA 

OIji>1]    -'4.    1904.) 

VVu'  i-.ditor: 

SiK—  In  M'Vir  i>MR'  dl  Manli  10  lliiri'  ;i|)|Hars  a  Kutr 
liiiipi  ■nni;,'  In  lii'  a  'irn'iiilly  rntii.i>iii"  li\  Mr.  Wallace 
llruad  upciii  an  arlick'  i.iiiilrilnili.(l  liy  nif  Liititlcd  'GuUl 
Mniiii!;  ni  RhiMK--ia/  It  i~  uiiinrtuiiatc  that  tlii'  i;c'ni.ral 
toiu'  III  Mr.  r,rciair>  i' intnliutinii  i>  nut  (aif  uliuli  inn- 
(lucts  tipwani  Irii'iulh  (li.~cu.>>ii  lu. 

Ill  till'  main,  tlu-  i.iitK'i>iii>  arc  sn  va^iulv  \nn  as 
scari'iU  til  warrant  ^nnmunt  I  lure  arc.  In  lUiA  ir.  snnu' 
viiu.s  ratlu  r  liircii)ly  f.\i)ri'.-.M.'(l  liv  Mr.  Ilruacl,  wl'.uli 
aiiiKur  til  int-  tn  he  iiarrnw  iiiiiii;^h  tn  invite  hrii  f  rijily 

Mr.  I'.rnad  Minis  tn  he  eiinl'n-~e(l  uiiii  rej^anl  tn  the 
ajiplieatiiin  nt  nian\  nf  the  reiii.irk.s  ecinlained  in  my  arti- 
cle, in  that  he  asMniates  tliein  whnlly  with  a  [iroperty  tipnn 
wliiih  he  did  si  iiiie  prns]iectiii^  wcrk.  .As  a  matter  "f 
t;ict.  I  utilized  the  inipreN^i,  m^  ;ind  I'ls^ures  nhtained  frmn 
fmir  (litYereiit  iiiiniiij,^  com])anies  with  wliich  I  have  been 
prcifcs>iiinall\-  eniinected  for  sciiiie  years,  'lakiiii,^  hi--  par- 
aj^r.iph^  seriatim  : 

I.  The  I'lnhaldiif^ha  mine,  situated  in  Mashnnaland. 
is  til"'  diiK'  mine  in  sfuithern  Rhodesia  which  it  has  heeti 
fiiund  advaniai.;e(iiis'  tn  npeii  witli  adits  or  cmss-cuts. 
rnfnrtimatelv .  tn  date,  this  class  of  wdrk  has  imt  heen 
whnlly  cnnhncd  tn  this  prnperty.  There  are  many  miius 
in  Rhndesia,  the  earl\  develn]imcnt  of  wlilch  was  at- 
tciii|ited  thrnuij;li  adits;  indeed,  at  hnth  the  lionsnr  and 
Teliekwe  mines,  a  pnnd  ileal  of  this  class  of  wnrk  was 
started,  liut  it  was  fnund  later  that  vertical  nr  inclined 
shafts  would  he  necessary  (hy  reason  of  the  limitnl 
amount  of  ore  ohtainahle  ahove  the  lowest  adit  level); 
so  that  under  adverse  conditions  and  at  great  expense,  in 
which  temporary  and  [lartial  suspension  of  milling  played 
en  impirtatU  p  t.  these  properties  were  permanently 
cipcned  through  shafts. 


MIXIXC  l\  RHODESIA 


•Jtil 


I  lure  ari'  m.iiu  ivlliMik-i:in  jirnspcets  uliu'i  (niit.iin 
ailit-.  Inn  1  kimw  ni  no  iii^taiux'  wIuTt.'  ilii^  v  nrk  lias 
lucii  "I  iniifc  than  itni]inrary  inipurtanri'  Iiidi-c!.  I 
Vw'W  '<{  "lu  piMpiTtv  ill  |iailiinlar  wluTc  iin  K -■-  ilian 
2.~i^'>  ft-  lit  wiirk  \va>  carrii'il  "'it  >  n  "W  \\\\\A\  I'litrrdpiud 
less  lliaii  ()(>  It.  aliiivc  llic  Icvrl  cf  ilir  adit 

2.   'I'lu'  ilcvatiiiii  (if  the  |ilati'au  iipmi   wliiili  I'.ulawavo 
is  siliiati'd,  is  as  stated,  naiiuly.  aljoiil  4.450  ft.  ali.  ivc  M.a 
level,  hilt   the  individual  liilK  and  kopics  randy  reach  an 
elevation  of  nion  ili.ni  ,V><i  ft.  ahove  the  uiidulatin.U  lilaiiis 
in  their  iniinediate  proximity. 

(  ine  of  the  si^dits  of  soutliern  Khode^a.  wliiih  has  evi- 
denth  escaped  Mr.  ilmad.  is  the  World's  \  ie\\  .  a  s])ot 
in  tile  center  of  one  of  tiie  lar^'  'i^raiu'.e  helts.'  and  naiiud 
l)V  tiiat  eiiijure  hnilder,  I  ecil  John  Rhodes,  in  the  very 
midst  of  tiiis  e.\tensi\e  area,  which  has  lieen  descrihed  as 
"an  tindnlatin:,^  plain,  enihraciiii,'  a  jjcrfect  si'a  of  conical- 
shaped  kopjes.'"  lies  all  that  remains  of  this  ^reat  man. 
Similar  natural  monuments  in  a  modified  lorm  are  louml 
in  all  the  ,L;ranitic  heits  of  RhodeMa.  In  the^e  hells  numer- 
ous (piartz  deposits  occur,  cliielly  .-.e.i^re^'ations.  but.  with 
the  possible  exception  of  one  or  two  lodes,  no  ecuuomic 
value  can  be  attached  to  these  occurrences. 

7.  .\s  compared  to  the  numerous  alluvial  districts  in 
which  the  writer  has  mined  on  the  I'acitic  slope  of  the 
L'nitcd  States,  the  ileposits  of  southern  Rhodesia  are  ex- 
tremely limited,  not  alone  in  vertical  depth,  but  in  super- 
ficial area.  llaviiiL;  examined  a  lari;e  mimbi.r  ■  f  these 
iKCurrences  in  Rhodesia,  I  have  rarely  found  a  depth, 
includinjj  'tip  dirt.'  to  exceed  Jo  ft.  .Mthon^di  >(  ,nie  of 
the  deposits  contain  fair  i^old-values.  ver\-  little  attention 
has  been  s'ven  to  this  branch  of  mininjj,  for  the  reasons 
already  stated. 

One  would  hardly  expect  tlie  same  dcizrce  of  erosion 
to  obtain  in  a  tropical  climate  as  in  a  climate  where  ex- 
treme cold  obtains. 


202 


Tim  licoxoMics  or  mimxg 


I).  I  was  not  aware  that  any  (Icfiiiile  statcnR'nt  lia<l  been 
made  Ijy  any  of  tlic  archx^ologists  who  have  investigated 
the  ancient  ruins  of  Rhodesia,  touchnig  the  peoples  wlio 
actually  were  responsible  for  the  numerous  old  workmgs 
existing  in  the  country.  I'roni  the  wurks  I  have  read,  I 
gathered  that  considerable  (U)ubt  existed  upon  this  sub- 
ject. Mr.  R.  X.  Hall,  who  has  made  an  exhaustive  study 
of  the  subject  and  who  has  carried  out  sotue  very  im- 
portant work  lately,  at  the  Zimbabwe  ruins,  in  discussing 
the  material  -.vhich  is  to  be  embo(lied  in  his  new  work 
shortly  to  be  published,  informed  me,  only  last  Novem- 
ber, that  he  had  been  able  (luite  recently  to  upset  many  of 
the  older  theories,  and,  in  fact,  is  making  many  alterations 
in  hi.s  own  original  work. 

11.  If,  in  assuming  a  payable  limit  to  the  grade  of  any 
given  ore,  and  graphically  segregating  tlio  payable  from 
the  non-payable  ore,  as  well  as  applying  the  .same  idea  to 
the  otlur  factor,  'width  of  vein."  one  is  not  comprehen- 
sivelv  defining  the  lateral  extent  of  individual  sh(K)ts 
which  it  is  intended  to  stope,  perhaps  Mr.  P.road  will 
favor  us  with  the  more  im]ioriant  considerations.  As  a 
matter  of  fact,  to  the  professional  man,  the  graphic  ex- 
pression of  values  and  widths  has  not  nnich  significance. 
It  has  its  importance,  howevtr.  in  that  it  provides  a  ready 
means  of  enlightening  those  who  are  unable  to  comiire- 
hend  the  points  at  issue  by  reason  of  the  maze  of  figures 
and  methods  necessarily  eni]iloyed  in  such  work. 

12.  Mr.  Broad  has  gone  entirely  astray  on  the  subject 
of  development  work.  In  the  hr.-,t  place,  it  is  not  cus- 
t-)inary  to  charge  the  cost  of  shafts  to  ■devrlopment  work.' 
This  disbursement  is  charged  direct  to  'cajiital'  account. 
All  shafts  are  treated  as  assets,  and  the  mom  \  >  expended 
thereon  are  redeemed  through  deiireciation  account,  as  it 
is  presumed  that  the  shafts  will  be  of  use  just  as  bnig  as 
anv  of  the  surface  eciuiimient. 

It  is  necessarv  to  establish  a  basis  in  dealing  with  the  de- 


! 


MIMXG  IX  RlfODf.SIA 


20:! 


vclopmcnt  rodciiiption  account,  tliat  is,  in  rcdceminj;^  tht- 
nioiifvs  expended  in  developing'  the  ore  which  it  is  expected 
to  mill,  and  as  all  other  distrihutions  are  made  on  the  basis 
of   the   tnnnaL;e   milled,   it   is   lisnal   to  treat   development 
account  in  the  same  manner;  the  cross-section  of  the  driv- 
ing or  \vinzin<;  has  absolutely  nothinsj;  to  do  with  the  mat- 
ter, nor  is  the  small  aniuunt  of  clean  payal)le  ore,  taken 
from    this    work,    of    signiticance ;    much    less    the    total 
cubical  contents  in  waste  rock  and  ore,  which  Mr.  P.road 
has,  xdthout  ha:iug  li.ul  any  zciit  zcidths.  taken  so  much 
trouble  to  compute  at  4.500  tons.    As  a  matter  of  fact,  in 
the  case  cited  it  was  found  advantageous  to  extend  the 
development  work   into  the  foot-wall  of   the   vein.     The 
calcni.-uion  was  ([uite  correctly  given  by  me,  and  was  ar- 
rived at  by  dividing  the  total  cost  of  development  for  a 
certain  period  by  the  number  of  tons  milled  during  the 
same  period.     The  cost  per  foot,  for  the  wdrk,  was.  as 
explained,    above    the   average,   because   a    comparatively 
small  fi-iotage  was  obtained  during  that  particular  j.eriod  ; 
but,  as  stated,  individual  months  could  have  been  chosen 
which    would   have   shown   a    great   improvement.      The 
object,    however,    was    to    show    the    distribution    of    the 
moneys  expended  tipon  the  work   rather  than  to  p-isent 
a  lot  of   flattering  figures.      Development    work,   liiat   is, 
drifts,  when  extended  with  machine  drills,  in  hard  rock 
and  on  a  comprehensive  scale,  seldom  costs  less  than  $20 
l)er   foot   in  Rhodesia.     This  of  course   includes  all   ex- 
penses not  onlv  at  the  mine,  but  in  London  and  at  the 
local  offices  and  engineers'  charges.     It  is  quite  clear  that 
an  excessively  small  fixitage,  where  a  full  staff  is  being 
emploved   and   other   constants   are   evident,    reflects    un- 
favorably in  the  cost  per  foot.     Perhaps  Mr.  P.road  had  in 
mind  the  bare  contract  price,  wdiich  in  Rhodesia  ranges 
from  Sf)  per  foot  in  oxidized  gmtmd  to  Si 5  per  foot  in 
hard   rock.     The   facilities  offered  in  individual  cases   is 
also  an  important  factor.  . 


204 


/'//£  ECOXOMItS  or  MIMXG 


13.  The  idea  o.\i)rcssL'(i  by  Mr.  llri'ad  that  it  vould  he 
advisable  to  exclude  the  air-compressor  I'runi  the  eciiiip- 
m-jnt  of  a  mine,  and  in  ctmsefiuence  ( h\  reason  of  tlie  ir- 
regular supply  of  native  labor)  operate  the  mill  irre.mi- 
larlv.  as  has  been  the  experience  of  more  than  one  mine, 
cannot  be  taken  seriously.  Tliere  is  not  one  mine  in  the 
whole  of  Rhodesia  which  has  been  able  to  run  contin- 
uouslv  on  ore  furnished  by  hand  iaboi .  It  is  not  usual  to 
charfr  anv  part  of  the  machinery  and  plant  to  develop- 
ment aLCount. 

14  u  referring  to  the  weight  of  stamps  I  had  no  par- 
ticuL.  plant  m  view.  I  have  myself  erected  three  milbs 
in  Rhodesia,  using  ditlferent  weights,  namely,  1.050  lb., 
1.150  lb.,  1.258  lb,  :  while  as  far  back  as  1898  I  erected  a 
mill  in  the  Transvaal  of  1,385  lb.  stainps.  I  subjoin  the 
weights  of  the  individual  parts  of  the  heaviest  stamps  yet 
made;  Stem.  604  lb.;  head.  437  lb.,  shoe,  289  lb.;  tappet. 
135  lb. :  total.  1.405  lb.     The  die  weighed  165  lb. 

The  evolution  of  the  mining  industry,  while  probably  not 
so  marked  in  Rhodesia  during  the  ]iast  three  or  four 
vears  as  in  other  countries,  has  brought  about  great 
changes  in  ideas,  imiiressions  and  methods. 

I  hope  that  Mr.  Hroad,  who,  as  indicated  by  his  re- 
marks, is  a  geologist  of  liigh  standing,  will  favor  the 
readers  of  the  Joiun.m.  with  his  impressions  of  the 
geologv  of  those  parts  of  Rhodesia  in  which  he  has  spent 
so  nianv  vears.  and  I  am  ^ure  that  such  an  article  from 
him  would  prove  of  great  interest  to  professional  men. 

I'ersonallv.  I  can  onlv  concede  a  dit'fe.ence  oi  opinion 
upon  those  subjects  which  in  my  original  paper  were  too 
gcnerallv  stated,  or  in  Mr,  Hroad's  criticism  too  vaguely, 
to  afford  ground  tor  either  criticism  or  reply. 

F.   C.   RoiiKKPS. 


SECRET   RESERVES 

(Kditorial.   May    12,   1904.) 

'I'lic  article  on  this  subject,  apinariiiij  in  litis  issue,  by  a 
writer  so  well  known  in  Australia  as  Mr.  F.  H.  I'athurst 
is  sure  to  be  read  with  ii  'erest.  Apart  from  its  local  in- 
terest, the  (luestion  discussed  involves  many  of  the  nice 
points  of  com])any  inanas^ement  and  the  responsibility 
which  is  inseparable  from  such  nianaj^ement.  When 
secrecy  of  any  sort  becomes  a  lever  oijeninii;  the  way  for 
successful  share  speculations  on  the  part  of  those  in  a 
position  of  trust  it  is  bad — unqualifiedly  bad — because  it 
means  not  only  that  investors  are  left  in  is^jnorance  of 
essential  facts,  but  it  involves  a  positive  dan.irer  to  the 
morale  of  the  statT  in  control  of  operations  at  the  mine. 
A  directorate  which  practices  deception  toward  its  share- 
holders must  expect  like  treatment  from  its  manaijer,  and 
he  in  turn  must  not  be  surprised  if  members  of  his  staff 
pursue  similar  tactics.  "T^on't  monkey  with  a  buzz-saw." 
To  plav  witii  a  code  of  honorable  conduct  is  to  under- 
mme  the  very  basis  of  business,  and  more  particularly  is 
it  essential  that  above-board  procedure  should  be  the 
constant  aim  of  those  who  wish  to  establish  confidences 
in  the  speculative  industry  of  mining. 


SECRET  RESERVES 

IJV    !•".    I  1.    I'.Al  UL  Ksr. 

Tlu'  fiucstinn  nf  tlu"  linur  in  \'ictoria,  Australia,  is  the 
ri.L;lit  (if  a  miiu'  nnnaijfr  to  kit'])  a  secret  reserve  nf  l^oM 
for  the  purpii.-j  of  a\eraj;iii,<;  the  yield.  .Vlteiition  has  heeii 
directed  to  the  sul)jcct  through  the  discovery  by  one  of 
the  directors  of  a  dee[)-lead  aihivial  mine,  th;it  the  ni.in- 
ager  kept  a  reserve  whicli  he  used  for  averasin.tj  pur- 
poses. The  auditors,  on  seeing  tlie  fact  announced  in 
the  .Melhounie  .Ir^^iis  that  such  a  reser\e  existed,  called 
on  the  mine  manager  to  ]iroduce  his  'gold-lwoks."  The 
manager  thereupon  forwarded  tn  them  two  hooks:  X".  i 
showed  the  gold  sent  hy  him  to  the  h.ank.  which  corre- 
spo:ided  with  the  yields  as  reporte<!  to  the  directors  and 
tlie  shareholders  week  by  week  :  Xo.  2  varied  frotii  Xo.  I, 
inasnuich  as  this  book  piirjiorted  to  sliow  the  whole  of 
the  gold  taken  from  the  sluicedioxes  da\  by  (la_\ .  and 
therefore  it  accounted  for  the  reserve  also.  This  reserve 
the  manager  had  made  up  by  taking  gold  from  the  daily 
yields  when  high,  and  ^luring  it  in  liis  safe.  It  went 
there  without  the  knowledge  of  the  board,  wiio  also  were 
not  made  acquainted  witli  any  withdrawals  fr' m  it.  The 
only  check  was,  as  is  the  case  with  all  \'ici  riaii  dec])- 
leail  mines,  the  sluice-man.  This  is  the  man  who  cleans 
up  the  slui':o.  and  he,  with  the  m;mager,  weighs  the  gold 
and  initials  the  entr\  nf  the  amount  in  the  manager's 
gold-book,  but  he  does  not  rejiort  to  the  directors.  The 
sluice-man  i.s  appointed  by  the  directors,  and  therefore 
he  is  supposed  to  be  independent  of  the  manager.  It 
may  be  ad'led  that  the  occasion  of  tlie  auditors  calling 
u[)on  the  mine  manager  for  his  gold-liook  was  that  the 
gold  in  reserve  was  not  shown  in  the  half-yearly  accounts, 

just  as  it  had  never  been  >hown  in  the  week!;,  yields. 
p..    »!,„    \;pt,..;^„    (• ;.,„•     \. 


Sr.CRIlT  RBSERl T.S 


2ir, 


])iil>lisli  a  full  'itatcnu'iit  of  assets  and  liabilities  each  lialf- 
\ear,  and  in  additiDH  the  sharelmlders  and  the  creditors 
liave  tiic  right  tu  demand  (and  must  he  supplied  with,  on 
payment  of  a  small  fee)  three  months'  acemnits  nf  a  min- 
iii.t^  conipan}-.  It  is  easy  to  see  that  the  first  f)f  these 
oblicfations — that  of  i)resentin<;  a  true  statement  of  assets 
and  liabilities — cannot  be  fulfilled  if  a  vital  portion  of 
the  assets  is  kejit  secret  at  the  mine.  In  the  satue  way 
it  is  evident  that  if  a  sharehokler,  in  the  exercise  of  his 
statutory  rij;ht.  demanded  a  com[)lete  statement  of  ac- 
coimts,  he  woidd  not  get  it  if  the  directors  and  legal  man- 


ager did   lint   include  tlii'- 


reser\e.      The  object    of 


the  legislature  in  allowing  this  privilege  to  creditors  and; 
shareholders  was  to  prevent  secrecy,  so  that  the  mining 
investor  might  be  on  the  same  footing  as  the  director  or 
any  other  officials  of  the  company.  Parliament  held  to 
tlie  o])inion  that  it  was  necessary  for  the  well-being  of 
the  industry  tliat  its  affairs  sliould  be  open  and  above 
board  as  far  as  was  possible,  and  very  few  directors  have 
had  the  temerity  to  offer  opposition  to  its  determination 
in   that  respect. 

Now  it  is  the  practice  of  certain  directors,  after  they 
have  appointed  the  manager,  to  make  no  inquiry  whether 
he  has  a  gold  reserve.  "We  have  confidence  in  our  mine 
manager  and  we  trust  him  to  work  the  mine  to  the  best 
advantage,"  they  say.  "if  he  thinks  it  is  desirable  to  keep 
a  gold  reserve  to  equalize  yiehls.  let  him  do  so.  We  do 
not  want  to  know,  and  if  we  do  not  know  we  do  not  tell 
a  lis  when  we  say  to  shareholders  that  we  are  not  aware 
if  a  reserve  is  kept."  It  is  clear  that  this  view  involves  a 
shirking  of  responsibilit}-.  In  .\ustralia.  whatever  he  may 
be  elsewhere,  the  director  is  a  trustee.  The  whole  spirit 
of  legislation  is  that  he  nuist  fulfil!  his  trust  or  be  re- 
sponsible for  his  dereliction  of  dut\-.  Indeed,  in  one 
case  it  was  decided  that  a  director  was  compelled  to  make 
ui)  the  loss  in  value  of  shares,  where  he  had  t(Jd  a  share- 


208 


Tim  liCOXOMICS  OF  MJMXG 


holder  wlio  had  asked  his  advice  oti  the  subject  to  liold 
on  to  his  scrip.  Tiiereforo.  as  (hrectors  arc  entrusted 
■  ith  the  control  of  a  mine,  they  have  no  rijjht  to  let  their 
mine  niana^'er  re,i;nlate  the  yield  un'css  they  are  fully 
coi^nizant  of  the  fact.  In  this  connection  it  must  be  ex- 
plained that  the  practice  in  X'ictoria  is  to  publish  yields 
weekly,  and  the  market  eljbs  and  tlows  as  the  returns 
vary.  Hence  an  additional  reason  is  afforded  certain 
directors  for  not  inciuirinLT  about  the  f^old  reserve,  be- 
cause they  do  not  wish  to  be  ojien  to  the  charge  of  having 
secret  information  that  would  advantage  them  in  stock 
and  share  dealing  as  against  the  ordinary  shareholder. 
It  will  be  seen  that  in  this  (juestion  of  the  gold  reserve 
two  factors  operate  with  mining  directors ;  first,  that  of 
trust  reposed  in  the  mine  manager,  and,  second,  that  of 
keeping  the  market  steady  by  [)resenting  average  yields. 

When  a  short  time  ago  Mr.  Herbert  J.  Daly,  writing  in 
London  on  the  subject  of  the  gutting  of  the  Iwnanza  ore 
in  the  Lake  \"iew  Consols,  justified  the  action  of  the 
management  in  that  matter,  he  came  in  for  criticism  in 
Australia.  The  argument  used  in  antagcjuism  to  his  was 
that  the  rushing  out  of  rich  ore  should  not  be  done,  un- 
K  ss  the  mine  is  well  developed  aheatl,  and  the  company 
is  financially  so  strong  that  it  can  see  its  way  to  mine  in 
that  fashion  so  as  to  give  shareholders  a  return  in  the 
(|uickest  possible  time.  Concurrently  also,  it  is  claimed 
that  notification  ought  to  be  made  to  the  shareholders 
that  they  must  not  e.xpect  their  \ield  to  keep  up  at  a 
bonanza  rate.  Now,  if  the  opposite  policy  of  keeping  a 
bank  in  the  mine  is  pursued,  then  there  will  be  just  the 
same  scope  for  manipulating  yields  by  averaging  them 
that  there  is  when  a  manager  keeps  a  secret  reserve  at  the 
surface.  Yet,  in  that  case,  the  directors  can  be  kept  in 
ignorance  miless  constant  sampling  is  done  and  assay- 
f)lans  are  regul.'irly  fmnished  to  them  to  show  how  the 
slopes  ,'ire  advancing  and  how  the  rich  ore  is  being  en- 


SECRlir  KRSIiRlllS 


2()'.t 


croachcd  upon  or  left  alone.  But  the  law  would  not,  as 
it  stands,  reach  a  mine  nianaj^er  who  did  this,  and  it 
could  not  touch  directors  who  niij;ht  not  know  anythinj^ 
of  the  true  position  of  affairs.  Of  course,  in  Victo'-'an 
quartz  mines,  where  it  would  he  almost  fatal  to  a  com- 
pany from  a  share-market  point  of  view  to  refuse-  to 
allow  a  weekly  or  fortni.ululy  insjjection  of  the  property 
t(.  shareholders  or  their  experts,  it  would  not  l>c  possible 
loni^  to  conceal  any  de])letion  of  the  rich  reserves,  or 
for  the  matter  of  that,  any  hoardiui^  up  of  them.  In  West 
Australia,  however,  there  are  mines  which  are  not  open 
to  inspection,  and  where  the  directors  put  themselves 
absolutely  in  the  hands  of  the  mine  managers.  In  such 
cases  it  is  evident  that,  if  the  franlcness  commanded  by 
the  law  in  X'ictoria  in  respect  to  reports  and  accounts  is 
not  practiced,  }:;freat  fraud  is  ])ossihle.  Yields  can,  if  a 
manager  is  dishonest,  be  manij/alated  so  that  if  shares 
are  wanted  to  he  bought,  n.lurns  can  l)e  made  low,  and 
kept  low  until  scrip  is  boutrht  in  small  lots,  when  the  re- 
turn can  he  gradually  increased  ;  i!:e  result  being  a  sharp 
advance  in  market  values.  Then,  if  a  bank  is  in  exist- 
ence, but  the  average  ore  is  losing  its  richness,  shares 
can  be  sold  short  and  yields  maintamed  until  the  crash  is 
wanted.  Thus  it  is  a  case  of  "Heads  I  win,  tails  you 
lose." 

The  same  position  exists  exactly  with  alluvial  mines, 
where  a  secret  reserve  is  kejit.  Th.e  company  is  in  the 
hands  of  the  men  who  know  of  it.  \n  opening  for  fraud 
exists,  and  it  is  undoubted  that  more  than  one  mine  man- 
ager has  succumbed  to  the  temptation  put  in  his  way  to 
co-operate  on  the  Stock  l'"\change  with  hrt^-ers  who  knew 
how  to  turn  to  account  the  secret  information  furnished 
them.  Thus  it  will  be  seen  that  wherever  reserves  of  any 
kind  exist  at  mines  tlie  ])ersonai  e(|uatioK  must  rule,  lu^t 
with  the  mine  manager;  and,  if  he  is  lutnest.  next  with  the 
directors  to  whom  he  reports  the  true  position  of  affairs. 


dfe' 


!10 


77//;  i.coxoMics  or  Mfx/xc; 


'I'lu'  tVi'liiiL,'-  III  \  ntnria  ti.ilay  i>  that  tlurc  (Hi-Iit  to  he 
no  inTscMial  i.(|iiatiiMi.  What  invi'.stors  want  is  tliat  they 
sliall  know  thr  worst  (ir  tlif  ht-st  (if  miiiiii}^  an<l  at  oiut. 
1 1  llic  i^riiund  i>  rirh,  it  i>U!.'!u  to  1)0  fairlv  miiu'd  and  tlir 
fact  R'lioitiil  that  tin-  \K-h\  is  hi^h  because  of  the  excep 
tioiial  (Hiaiit\  of  the  ore  or  the  };ravel.  (  )r  if  the  <,T')U!id 
becomes  poor,  tliey  do  not  want  the  tnana.LTer  to  have  his 
eye  on  the  ^hare  Hsl  to  try  to  keep  (|iiotations  at  a  tic- 
titiou>  price  h\  averai^int,'  yields  at  a  fii,nire  whicli  the 
con(htion  of  tlie  mine  does  not  jiistif\.  'I'hey  want  thi' 
(hrcclors  to  isiahhsh  cash  reserves  (which  will  ap])ear  in 
till'  balance  sheet  I  uht'n  times  are  L^ood.  and  to  equalize 
dividends  from  that  reserve,  or  to  use  it  to  keep  the  mine 
piinj,'.  And  above  all.  they  ask  that  the  truth  shall  be 
tol<l  at  all  times  in  respect  to  the  position  of  the  mine 
and  as  to  the  actual  returns  obtained.  There  can  be  no 
doubt  as  to  the  trend  of  public  sentiment  in  this  matter, 
for  it  has  been  i^ravely  pni])osed  bv  the  C'h.imher  of 
Alines  of  X'ictoria  that  mine  manaq'crs  shall  be  com- 
pelled to  accompany  all  their  rejiorts  with  a  declaration 
that  the  ci  -tents  are  true.  Indeed  it  is  likely  that  the 
outcome  of  the  recent  discussion  on  secret  reserve.-,  will 
be  that,  in  the  .\mendinp  Companies  I'.ill.  an  attempt  will 
lie  made  to  place  a  proMsion  to  that  effect  on  the  statute 
book.  Then,  if  manatjers  do  not  tell  thi'  truth,  they  will 
be  liable  to  a  criminal  prosecution  for  perjury,  and  di- 
rectors who  bold  hack  facts  which  mic:bt  influence  the 
course  of  the  share  market  will  run  the  risk  of  becomins::^ 
subject  to  action   for  breach  of  trust. 


THE  VALUATION  OF  GOLD  MINES 


I'.V    1  I.   (    .    I  IddVI.U. 
(May    iq.    i(»"4) 

As  l>i'fi)ri',  tliis  (liscussinn  is  limitt'il  to  tliat  class  (jf 
L;nl(l  niiiu's  tlie  continuity  of  wliicli  in  depth  is  uncertain. 

If  a  broad  survey  be  made  of  tbe  method  of  valuation 
(jf  mines  in  ditTerent  countries,  by  dirterent  peoples  or  by 
different  individuals,  there  will  be  seen  to  be  tlie  widest 
diver^^iice  in  the  jioint  of  view.  The  pendulum  of  valua- 
tion swings  between  a  mniinnmi  (as  represented  in  tlie 
demands  of  the  American  engineer  for  a  jmrchasc  price 
to  exceed  but  little,  if  any.  the  actual  exposed  profit  in 
sight)  and  an  extreme  maximum  allowed  by  some  tv\>- 
reseiitatives  of  the  ICnglish  mining  investor,  who  find  the 
value  by  capitalizing  the  possible  dividends  at  a  some- 
what higher  rate  of  interest  than  Government  bonds. 

The  whole  of  this  wide  variation  in  theory  and  practice 
results  from  a  difterent  attitude  toward  that  portion  of 
tbe  value  of  a  mine  which  nnist  be  assessed  to  extension 
in  de])th.  The  one  extreme  allows  but  a  few  feet,  whik' 
the  other  practically  ignores  tbe  essential  characteristic  of 
mining  investments — the  necessity  of  recovering  capital 
coincidently  with  an  interest  which  compensates  for  the 
risks  taken. 

Were  we  to  stick  .strictly  to  the  mi;ii:num  figure,  but 
little  business  would  take  place,  and  but  few  funds  would 
be  available  for  expansion  of  the  industry.  There  is  an 
inherent  speculation  in  mining,  and  it  is  this  speculation 
which  attracts :  without  speculation  for  large  returns  but 
little  gold  mining  would  be  done.  I  think  it  is  certainly 
true  that  mine-,  on  the  average,  yield  a  much  greater  profit 
than  the  minimum  stated.  On  the  other  hand,  it  is  ob- 
vious that  the  maxinuitn  value,  which  one  finds  only  too 


I 


Jl-' 


rill:  i.C()\(>MlLS  Ol-  M!.\L\(; 


often  as,->i>.st.-(l  '  1  ^tock  markets  hy  a  jjroccs.s  of  multi- 
plication of  ilividiiuls,  is  siinplv   ^anililiii^. 

\  arinii^  ]iri>p(i.sals  have  Ihcii  luailc  to  meet  this  ili- 
verj;ence  of  \u\\  :  u^uall\  lhe\  are  attetnids  Xu  Ljive  a 
rule  to  llie  >])eenlator  or  investor  i)y  wliicli  lie  ma;  on 
tile  aserai^e  mea-nre  iii>  mme.  i-".\'ery  mine  i>  so  niueli  a 
()roi)lem  in  itself  that  all  ^generalization  is  (iifticiill.  hut 
any  sound  methoil  whieh  calls  the  attention  of  the  in- 
vestor to  the  real  !)a>ic  facts  of  \alualion  an<l  tends  to 
keep  hiiu  on  the  ri.^ht  track,  is  useiul. 

The  favorite  method  of  hlendiuLT  the  extremes  ha'^  hecn 
to  ad<l  a  proportion  to  the  protit  in  sii;ht.  In  a  recent 
issue  of  this  Joi  k.n  \i.  it  is  aiKdcated  that  in  j.;;cneral  a 
mine  is  worth  30  jier  cent  more  than  the  net  protit  in 
si^^lit.  or.  in  other  uonl-.,  the  exteii'^ion  in  depth  is,  on 
the  averai^e.  worth  this  amount. 

My  friend  Mr.  J.  11.  L'urle,  working  on  somewhat  the 
same  hasis.  in  outlininjj  a  theory  of  sound  investment  in 
niinin;^''  shares,  says  in  effect :' 

1st.  The  development  in  the  bottom  must  be  s^ood ; 

2nd.    The  mine  must  pay   10  per  cent  per  annum  ; 

3rd.  There  must  he  (kj  jier  cent  of  the  price  of  the 
shares  in  sifj^ht. 

In  other  words,  with  favorable  j^'colot^ic  conditions. 
Mr.  L'urle  estimates  in  i^eneral  that  extension  in  <lepth 
is  worth  40  per  cent  of  the  whole  value,  or  (j6  per  cent  of 
the  protit  in   si.yht. 

I  take  it  that  these  schemes  of  valuation  refer  onlv  to 
the  safety  of  the  ori,i;iiial  cajntal,  and  do  not  include 
interest  thereon,  it  beini;-  considered  that  the  protit  of 
the  transaction  shall  arise  from  the  possibilities  bevond 
recovery  of  capital.  1  am  not  disputin.i,'  the  possibilitv 
of  thus  covering  the  necessary  prolU.  but  there  seems 
something  wanting  where  there  is  no  expressed  basis  for 


'  7/i,'    I'r.iiuiuiiif    ('Tnnll(-l^^      C;,'r,t     r      ir 


r.ii.r.niox  oi-  cold  mis  lis 


\\:\ 


calculating;   tin-   tiiiic,   i.to..   to  ^mw  a  certain    iiUiTfSt   as 
will  as  recovery  of  cai)ita!. 

Tlicoreticallv.  ai  least.  ai:y  >elunie  of  valuation  of  ex- 
tension in  (kptli,  liaxd  u]ion  ratio  nf  ore-rescrvcs  or  i)rntit 
in  sif;lit.  is  ulmllv  wmn^.  'ihr  (Hiaiitity  of  ore  in  re- 
serve is  a  !tntt<-r  nf  nianai^fnieiit  iupt  necessarily  de- 
|ienili'iit  on  the  -i/e  of  the  mine.  A  mine  ma\  have  a 
reserve  so  larire  as  to  impK'  an  extensimi  in  ilepth  be- 
yond all  reason,  or.  on  the  ntlur  h.inii.  a  mine  m,i\  he 
extreinelv  valiiahle.  with  no  protit  m  ^it^ht  :it  all.  No 
mine  starts  out  \\itli  an  ore-reserve,  and  ni)on  this  h.isis  (jf 
mine  vahi.ation  the  whole  of  prospectini,'  ventures  would 
he  eliminated  from  le.!,''itimate  mining;.  This  hasis  of 
\alu.-Uion  aI>o  fails  to  t.ake  into  .accoimt  the  .Lrreat  v.iri- 
ahilit)'  in  j;eolo,i,Mc;il  character  between  ditterent  mines 
and  different  districts  in  relation  to  i)rob.abilities  of  ex- 
tension in  deiith.  Morecner.  if  1  am  rij,dit  in  the  'eco- 
nomic limit'  .if  ore-reserves,  as  stated  in  a  previous 
article,  to  be  in  the  most  cases  from  two  to  three  years' 
output,  then,  owing  to  the  limit  reserves  thus  permissible, 
if  we  estimate  the  value  at.  say.  50  jier  cent  more  than 
such  reserve,  the  m.ijority  of  mines  would  yield,  on  above 
footinp^s,  from  20  i)er  cent  to  40  per  cent  per  annum. 

Ina.imuch  as  the  value  of  the  mine  is  dependent  (out- 
siile  of  the  reserve  profit)  upon  the  distance  that  the 
deposit  will  extend  in  depth  (or.  in  rare  cases,  laterally) 
bevond  the  region  of  vision,  the  most  logical  basis  for 
estimation  would  be  a  computation  of  how  far  such  ex- 
tension is  necessary  to  justif\  a  given  value,  or  to  what 
deinh  the  particular  deposit  may  be  risked  to  so  extend  ; 
in  other  words,  the  depth  of  extension  should  be  con- 
sidered instead  of  a  iiroi)ortion  of  the  profit  in  sight.  By 
such  a  method  not  only  would  broad  generalizations  be 
avoided.  biU  a  sort  of  geological  basis  would  be  found. 
The  general  character  and  experience  of  the  district  for 
continuitv  ;    the  special  conditions  of  each  particular  de- 


Jll 


////•  /iCoxoM/cs  or  MiM.w; 


p)sit  as  to  M/i-  Ml  i.iiImiiIics  ;  tlu  kiiouii  lacliirs,  mhIi 
as  Ijorc-liolf, ;  till-  ik'Vi.'lii|)im'iit  on  adjomini;  iinius,  and 
tin-  l)()^sll)llltn•s  outsiilf  of  iiniiicdiak'  oicbudic-,,  etc.. 
uoiiM  all  loiiic  iii[.,  |,lav  in  the  ptoljahilitios  assessed. 
1  Ik-si-  factors  arc  ^ln.-,Md  over  on  an\  -\'-ttiii  of  propor- 
tional vahiis. 

An  examiik-  of  the  working,'  of  these  niethids  of  esti- 
mation nia\  he  t.iken.  it,:  instance,  In  f^'rimpmu:  the  lead- 
iii.L,'  mines  in  West  Australia.  .\  j^'ronp  of  i :;  niine>  in 
tiiat  >tate  is  at  this  date  valued  on  the  London  market  at 
i  14,500.000.  riie\  have  profit  m  si^dit  of  £  1 0,500,0CX). 
l'|)on  a  basis  of  addin;,'  (>i>  per  cent  to  the  jirotit  in  sirrht, 
these  mines  are  about  cornctly  valued.  To  recover  the 
c;i|)ital  sum  represented  ahov.  .  the\  will  have  to  extend 
something'  like  J30  ft.  helou  the  present  bottoms,  and  to 
repay  cajiital.  and.  say.  0  per  cent  iiiter.'st  duriiii;  the 
whole  pi-riod,  lhe\  imist  extend  about  4X0  ft.  below  their 
present  lM)ttoms.  Tin.  depth  is  not  an  unreasonable  risk, 
takin;,'  all  matters  inti>  consideration.  (  )n  a7'i-ni:u-  over 
tile  whole  Kri'i'l'.  ''"-■  two  bases  of  valu.Uion  a-ree  fairlv 
well,  but,  taking  W  mine,  for  iiist.iiice.  with  ,111  ore- 
pipe  ,V)  ^>y  '"5  't..  ai;  v'xtensioii  e.i  4S0  ft.  i.,  vrv  jirob- 
lematical  iii<ieed,  and  even  more  .so  m  ihe  case  of  the 
'15  mine,  composed  of  leiiticules  of  nw  bv  no  means 
certain,  even  laterallv  :  >et  in  'C  mine,  with  two  jiaralkl 
ore-shoots,  each  ].imm  ft.  lon^'-  ami  i_'  ft.  wide,  with  the 
adjoiiiinir  mine  jiroved  already  Ckjo  ft.  deei)er,  even  a 
longer  life  could  be  gr.inted. 

Taking  a  leading  mine  in  the  Kolar  district  in  India, 
valued  by  the  market  .at  i;v''0(),'K)(),  in  which  ])rotit  in 
sight  is  roughly  £■)_>( ),(xjo,  the  jmjportioiial  value  would 
assess  it  to  be  worth  aboiit  £i,45o,fxx).  This  sum  of 
i:i.45o,(j<JO  would  not  <  nly  be  rec.jvered,  but  al.s.i  with 
interest,  by  an  extensi,,n  of  ^oo  ft.  further  in  depth. 
\\  ith  a  continuous  run  of  ore  ,V3(X)  ft.  long,  and  the  gen- 
eral  geological   condition^    favorable,   there   would   seem 


VALVATIOX  Oi    COf.n  MIXES 


•s 


to    Ih'    warrant    for    conti.K'iici.'    to    coii^iilcral)lv    (greater 
(K'l>tl'  than  siuli  a  valuation  would  ^;raiit. 

in  'Ik-  ilftailc'l  juilj^iiifut  as  to  tlu'  prohahility  of  ox- 
tin-ioii  in  iliptli.  as  stated  above,  other  con(liii(,us  iKini' 
ei|ual.  the  si/e  of  the  ore-Ixiily  becomes  the  },'reatest  fac- 
tor. .\-i  ored)ody  i.ooo  ft.  loni,'  is  iniieti  more  likely  to 
extend  tlian  one  lo  ft.  loni;.  That  such  ixtei.si.iii  is 
absolute! v  ji-oportii  iial.  1  -h-aild,  of  course,  not  contend. 
An  old  I  Ornish  sa>in.t;  uas  that  an  orebody  would  ex- 
tend in  depth  a  distance  i'(|ual  to  its  leiitrth.  This,  al- 
tlioui,d:  i'.  shows  an  ai)prec.iation  of  the  iii.ittcr  from  ex- 
perience, does  not  meet  the  case  in  ore-shoots,  whose 
j,'eneral  character  implies  greater  dei)th  than  length,  nor 
does  it  meet  the  case  for  p.irtiallv   exhausted  mines. 

In  depth.  dei)osits  seldom  terminate  .abruiitly.  The 
lenlieularilv  of  ore-shoot-  i-  i;ener.all>  recos^Miized.  ami 
that  ore-shoots  usually,  in  their  terminals,  display  len- 
ticular ehar.ieter  is,   I  think,  i^enerally  accei)ted. 

It  this  were  established  as  ai  avera.i,'e — ;i  worthy  prob- 
lem for  miniiii:  i^eoloijists — it  would  be  possible  to  state 
roui^hlv  that  the  minimum  extension  of  an  orebody  or 
ore-shoot  in  dejjlh  would  be  a  factor  of  a  radius  not  less 
than  one-half  its  len.mh.  I'.v  lent^th  is  not  necessarily 
meant  horizontal  lenu^th  but  a  section  i)eri>endicular  to 
the  downward  axis,  lly  stud.y  of  jj  mines  with  whose 
orebodies  I  havi-  been  able  to  familiarize  m\-elf.  I  find 
this  rule  of  minimum  to  apply  in  all  cases  but  two,  by 
takint,'  a  number  of  points  from  top  to  bottom  of  the 
workinj^'-s.  Sul.>ject  to  wider  ex])ression  of  experience,  I 
believe  that  an  amount  of  ore  thus  rej  resented  can  be 
about  as  safely  assumed  as  cm  the  continuity  of  value 
throuf^di  ore-reserves  blocked  out.  I  do  not  propose  this 
as  a  method  of  determination,  either  of  maximum  or 
minimum  value,  but  as  a  yard-stick  iiossibly  useful  in 
formiiif^  a  judL,Mnent.  b'or  instance  in  the  'C  mine, 
cited  above,  having  an  orebody   i.cjo  ft.  long,  by  such  a 


I 


21  r. 


TIIR  liCOXCMICS  Of  MIXIXG 


calciilatiini.  if  wc  a.v^min,-  mat  {hv  (iribocK  is  about  to 
die  out,  and  that  tlic  Ijnttoni  \\cjrkiiit;s  represent  a  cross- 
section  of  the  lens,  the  mininuiin  depth  would  he  500  ft., 
or  ;iii  avera,L,'-e  of  the  whole  ,Nteti(Hi  of  the  oreljods  ahout 
2/^  ft.  This  distance  (when  conijiared  with  the  necessity 
of  orehiiily  to  extend  only  200  ft.  to  return  the  present 
market  price,  and  ciily  4i<(>  ft.  to  relurn  the  price  and  in- 
terest) would  indicate  that  the  present  ()rice  is  fairly 
sound. 

In  .i^^'iieral,  the  j)roposal  is  that  this  class  of  mine  .should 
be  valued  at,  (a  )  ;lie  i)r<irit  in  sii^ht ;  (b)  a  further  amount 
ba.sed  upon  the  e\ten>i  )n  in  depth  of  the  orcbody  (in 
volume  and  value  as  disclosed  at  its  lowest  section) 
for  .-i  di-taiice  based  uj-on  the  probabilities  in  each  par- 
tictdar  mine,  instead  of  the  rous,,di  anfl  ready  method  of  a 
proportion  of  profit  in  sight. 


TREATMENT  CAPACITY   AND    ORE- 
RESERVES 

(May    Jt).    19U4  ) 

The  Editor: 

Siu — I  ctuifess  to  a  pnod  ,loal  of  disappointment  at  the 
mcaj^er  discussion  that  Mr.  H.  C.  Hofu'cr's  article  on  this 
subject  has  ehcited.  To  ni\-  mind,  u  i;-,  from  its  form  of 
treatnuiit.  the  most  im])ortant  on  the  peiierrdities  of  min- 
inpf  ensincerinf;  that  \vc  iiave  seen  for  some  tinx'  ])ast. 

It  caiiiiot  be  douJJted  that  the  clear  understanding  of 
any  problem  in  the  abstract  assists  materially  in  the  mas- 
tery of  each  example  in  the  concrete  ;  and.  though  such 
abstract  understanding  may  not  be  tlu-  sine  qua  uon  of 
grasping  the  concnte,  those  with  the  clearest  understand- 
ing of  the  abstract  usually  err  the  least  in  the  concrete. 

Notwithstanding  the  examples  cited,  Mr.  Hoover's  pa- 
per is  one  of  generalities,  and  his  broad  generalizations, 
which  crystallize  into  words,  and  perhaps  in  a  somewhat 
novel  form,  the  practice  of  more  than  one  engineer,  can 
be  handled  with  safety  only  under  expert  advice,  being 
in  this  resjiect   decidedly  dang'. rous  in  lay  hands. 

As  an  instance,  the  temptation  is  almost  irresistible  for 
the  superintendent,  when  his  costs  are  cut  down  by  the 
addition  of  a  secondar\  plant,  to  lower  the  grade  of  his 
ore  as  well,  by  the  inclusion  of  rock  that  would  have 
been,  but  for  the  secondary  plant.  '  'ow  treatment  grade. 
This,  however,  upsets  all  the  c  ie;-'  ^ns  upon  which  the 
secondary  plant  was  authorize!;,  i  ,)e  sure,  the  condi- 
tion of  the  mine  may  actuall\  justify  it.  but  imless  that 
were  recognized  as  among  the  factors  of  the  problem,  and 
allowed  for  when  additions  were  made,  ihc  propertw 
with  the  increased  outpiU  .uid  with  the  increased  capital 
outlay,  due  to  the  secondary  plant,  to  pay  interest  upon, 
will  actually  be  giving  a  less,  return  per  centum. 


-•18  Tllli  1     OXOMICS  or  MIMXC 

Wliili-  till.'  t'xact  form  of  ^tateiTK-nt  ni;uk-  In  Mr.  Hoo- 
ver of  till'  fundainciuals  of  tlu'  i)rol)lcrn  is  most  strikin<j, 
I  am  fa--  from  sure  that  the  simple  comi)arative  motliod 
of  stateiiHiit  of  the  ease  of  tiie  primary  plant  for  a  mim- 
her  of  years,  as  a,i^ainst  the  primary  ])his  tlie  secondary 
for  the  same  number  of  tons  and  years,  is  not  sim[)ler  and 
less  liable  to  error  in  calculation;  at  all  events,  the  latter 
is  th.e  form  in  \vl;'ch  the  problem  sugj^ests  itself  most  nat- 
urrlly,  and  on  these  lines  the  following-  table  of  coeffi- 
cients lias  been  prepared.  It  is  assumed  tliat  current 
profits  arc  transferred  into  interest-bearint^  deposits  quar- 
terly, and  that  the  interest  rate  is  i  per  cent,  per  quarter. 
Tlii-  would  be  (|uitc  compatible  with  common  business 
arran^i^'-emeiits.  I"or  any  case  of  primary,  or  iirimarv  and 
secondary,  plant  let  T  be  the  (juarteriy  tonnage  and  P 
the  profit :  P  T,  then,  is  the  iiuarterlv  profit. 

At  the  end  of  the  first  ([uarter  the  profits  will  be  P  T; 
at  the  entl  of  the  sjcond  quarter,  P  T  plus  o.oi  P  T  or 
i.oi  P  T;  and  the  total  profit  for  the  tv,o  ([uarters,  2.01 
i'  T.  .\t  the  end  of  the  third  quarter  the  total  profit  will 
be  3.0301  P  T.  In  a  word,  the  case  is  that  of  the  amount 
of  an  annuity  of  i  in  ;;  years,  and  by  the  formula  for  this 
(Kent,  p.  15)  the  coefficients  can  be  worked  out.  For 
the  assumed  case  and  for  six  years  they  are  given  below: 

COI'l'MCIlA' IS  OF  P   T 

Gain. 

Quarterly.  Total 

Q  Months I,  J. 

•5  ][  I.OI  2   01 

0  .    "  1. 0201  30.^01 

1  ''"'"'  I  0^0?  40(i<i4 

.1  -Months  10406  s  1010 

^        ]]         I  o:;io  6.i.i;.'o 

9        "         I  o^it.';  7-2Li^ 

'   ' '""'^    1 .0721  8  2S,6 

■^  M"iiihs 1 .0X20  9. .1685 

''        [[         I  o<),?7  10.4622 

'>     .   "         I   1046  II  !;«)S 

•'  ,','""    i.ii.=;7  12  6S2.<; 

.1  -^''","lis  1   ,j(«  i.v8og< 

^        "         ■ I  'jHr  14.9474 


c.ip.ic:Ty  .1X0  orh  rilsi'.rjt.s.  -jik 

Gain. 

Quarterly.  T.-tal 

6  Months   I  i4')5  i6  og6q 

4  y't'iirs   I    i6io  172579 

,^  Months  I   i7.'6  184,^05 

<)         "          I    ll^4.^  l(>  6148 

9         "          I   iryu  20  8iog 

5  )',,i/-.t    l.jnXi  220100 

3  Months  1.2202  23.2302 

(>         "          I  2324  244716 

'i         "         1-2447  257163 

6  Vrurs    ',i>7^  26.9735 

The  i)ractical  use  of  this  is  illustrated  below  for  two 
extreme  cases : 

Primary  I'lant 

Ca.se    1  l\T;e  2. 

TonnaRc  per  quarter 7,500  7.500 

Pnilit  per  tnn $1.00  $!,oo 

Quarterly  pmlit  (PI) $7,500.00  $7,50000 

lixed  charges    .30  '   I  00 

I'ruuary  and  S,\.>)iiiiiiy  !'!iinls. 

I'oniia.nc   per  qnarlcr io,o<io  in,ooo 

Prolit  per  ton  inorea-.e<l  tonnaij;o $1   30  $2.00 

Profit  per  ton  on  whole  tonnage i  075  i  .25 

Qnarterly  profit   (PI) 10.750  00  I2..500,00 

L'sitirr  the  coefficients  as  above  pivcn  and  substituting 
th^'  vakics  of  P  T,  we  get  the  following: 

Case   1  Ca-^e  2 

Case  I  &  2,             Primary  &  tVunary  & 

I'rimary.             Sccutiitary.  Seeomlary. 

Tons    60,000                   .  . ,  ,  .... 

Time    2  vrs.             i'^,  yrs.  I'/j  yrs. 

Profit    $62,000              $66,000  $77,000 

PIms   i-.!t(rr^t   for  two  quar- 
ters,   coinpoundeil ....                  67 .000  79.OOO 

Cain   over  priniarv ....                 $5.chx)  $i7.o<k) 

Tons    90.000  .... 

'I  inip    3  yrs.            2'4  yrs.  2'.;  vrs 

Profit    $95,000            $101,000  $117,000 

Pins  interest  for  three  qii.ir- 

ters.  comi)ouii(le(l ....               104.000  ui.eno 

fiain  over  pnntnry $g.ooo  $26,000 

Tons    120,000                   ....  .... 

I  i'lH'    4  yrs.                 3  yrs  3  vrs. 

Profit    $129,000            $i.Vi,ooo  $i5ij,'o(X3 

Phis  intcre-t  for  four  quar- 
ters compounded 143.000  16501x3 

G.iin  over  prnnary $14,000  $36,000 


iJO 


77//;  r.cnxoMics  or  mixixg 


By  this  comparison  (of  what  may  he  a  iioniial  uitli  an 
cxccfdiiii^ly  almnmial  case  of  tixcii  cliarj:;cs;  is  clearly 
shown  the  inipMrtai  1  jiart  this  ti\eil-char,<,'e  item  of  Mr. 
Hoi.ver's  plays,  a  part  so  important  a>  to  call  for  the 
carefiil  sepfrc.s^ation  of  all  such  iien:^  in  mine  accotintinjj, 
so  that  the  ratio  of  plant  to  reserves  may  he  readilv  and 
constantly  canvassed,  witliont  the  necessitv  of  a  sp.ccial 
and  lahorioiis  investij,'-ali(jn.  Air.  lloover'>  separate  items 
of  <jain  are  all  inchuled  'automatically'  in  the  figures 
14,000  and  35,cKK)  (  ijo.ooo  tons  and  four  years,  Cases  i 
and  2),  thus,  10,000  tons  per  year  for  three  years  equals 
30,000  tons,  the  increased  tonnage  per  year,  and  fixed 
charges  for  tiie  two  cases  would  be  $9,000  and  $30,000 
respectively,  and  die  several  interest  items  amount  to,  .ip 
proximately.  $5,000  and  $6,000;  so  that  fixed  charge 
plays  by  far  the  most  important  part. 

While  going  with  Mr.  Hoover  in  the  foregoing  to  the 
full  extent  of  his  argument  regarding  the  maxinnim  per- 
missible ore  reserves.  I  do  not  care  to  .accede  unreserved- 
ly to  the  priipositicju  that  the  'maximuni"  provided  as 
above  should  also  form  the  mininuim.  There  are  certain 
classes  of  deposits  that,  from  geological  structure  and  oc- 
currence, can  he  reckoned  on  more  definitely,  within  their 
limus.  than  the  standard  quartz  vein  :  there  are  also  con- 
ceivable cases  where  the  additional  securitv  of  the  invest- 
ment would  Seem  to  he  do  clearly  bought  bv  keeping  a 
three  or  four  year>'  reserve  blocked  out.  Such  would  he 
the  case  of  a  i^ine  with  many  small  veins  and  heavy 
ground,  where  llie  additional  charge  fnr  repairs  an-i  for 
interest  on  development  would  seriouslv  ini])air  the  prof- 
its. V\'ith  such  particular  cases  in  mind,  the  minimmn 
proposition  quoted  does  not  api)ear  so  inevitable  as  the 
maximum,  though  it  can  be  granted  tli.it  in  the  majoru\ 
of  in-lances  it  aitords  a  safe  rule  fnr  practice. 


San  Francisco,  Mav  12.  1904. 


R.  (jn..M AN  Hkow.v, 


AMORTIZATION 

(.June    .',     i'j'ji 

The  Editor: 

Sii4 — Tlio  Mihjtct  of  "Mine  Equipment  and  Ore  Re- 
serves' has  been  so  well  treated  by  experts  in  the  JoiR- 
.N Ai,  that  I  hardlv  leel  competent  to  join  in  the  discussion 
from  the  scientific  side.  I  wcmld  like,  however,  to  say  a 
few  words  on  the  (|i-.estinn  of  amortizatiim.  which  iuirdly 
seems  to  be  understood  by  some  of  your  currespondents. 
1  feel  further  dibi)osed  to  do  so  as  some  of  my  friends 
have  asked  for  a  little  instruction  on  this  point.  The 
word  amortization  is  French,  but  it  is  a  ^ood  one  to  take 
over  into  English  speech,  as  we  have  nn  single  word 
which  exjircsses  the  idea.  .Sii;king  fund  does  not  covei 
it.  for  that  is  applied  only  U>  some  sp>cial  provision  for 
tile  pavnient  of  boi'ded  debt  or  debentures.  As  nearly 
as  1  can  express  it,  amortizatici  is  the  provision  from 
earnings  of  a  fund,  in(le])endent  of  dividends,  which  will, 
in  a  given  period,  repay  the  original  investment.  To 
provide  such  a  fund  is  not  usual  in  this  country,  though 
it  is  frequently  done  in  Ivarope ;  and  in  France,  at  least, 
it  is  required  by  the  law  governing  the  operations  of  in- 
corporated companies. 

.\  mining  investment,  in  tlie  great  majority  of  cases, 
is  a  terminable  investment,  not  a  permanent  one.  That 
is.  it  will  end  and  b'jcome  unproductive  after  a  time, 
shorter  or  longer,  according;  to  the  nature  of  the  mijie. 
It  is  not  a  permanent  uivestment.  like  a  railri^ad,  which 
may  be  expected  to  last  and  to  return  profits  for  an  in- 
definite period.  .A  mining  investment,  t'v.'refore,  'o  be 
good,  should  return  not  only  ordinary  interest  on  the 
capital,  but  a  further  sum,  sufiticient  tf~  repav  the  orig- 
inal capital  during  the  life  of  the  mine.  .\  railroad,  for 
instance,  with  proi)er  allowance  for  repairs  and  renewals, 
will  probably  be  earning  profits  and  be  worth,  at  least  as 


2-'         Tim  r.coxoMics  of  mixlxg 

nuu-li  as  now,  fwcmy  t)r  lurty  years  lu'iicc;  and  its  cuiurs 
will  still  liavf  tiK'  security.  But  twenty  or  fortv  vears 
from  n.)vv  the  nwners  of  a  mine  now  profitable  ma v  have 
nothiny  but  some  extensive  e.\cavnti(Mis  and  a  lot  of  ma- 
chinery, which  is  likely,  at  the  best,  to  be  worth  r.nlv  its 
sellm-  value  as  scrap.  So  with  all  minint,^  investments; 
they  run  with  the  life  of  the  mine,  and  the  return  .should 
be  lar-e  en,m-h  to  c(iua]  the  capital,  phis  interest,  durin,^- 
that  life,  whatever  it  mav  bo. 

In  IVance  the  nsual  custom,  I  believe,  is  to  divide  the 
amortization  fund  among  the  stockholders  when  the  com- 
pany has  to  -o  out  of  business.     In  Germanv  verv  little 
amorti;^ation  is  done,  for  the  German  custom' is  to  nurse 
a  mine  and  carry  it  along  forever  l,v  taking  as  little  out 
ol  It  as  possible  each  year.     The  exception  is  found  in  a 
few  of  the  big  coal  comi)anies,  and  thev  have  amortiza- 
tion funds,  which  are  usuallv  apj^lied  to  the  purchase  of 
more  coal  lan.ls.     In  lu.gland  they  do  not  say  amortiza- 
tion,   f,.r   y,,nr    l-.nglishman   has   a    strong  propensitv  to 
call    things   i«y   names   that   mean    sometl'iing   else.    'l!ut 
they   have  depreciation   funds,   surphis   funds   and   what- 
not, which  amount  to  the  same  thing.    There  are  various 
ways  ni  using  these  fu,  ds.     Thai  most  approved  seems 
to  be  the  purchase  of  new  i.roperty.  so  that  the  companv 
may  be  hept  alive.    (  )ccasionally  the  funds,  whatever  thev 
may  be  calle.l,  are  returned  to  stockholders;    i'-.s  is  often 
<lone  by  buying  in.  ,,r  paying  off.  part  of  the  stock  from 
time  to  time,  so  that  the  capital  stock  is  reduced  gra.l- 
ually.  as  the  mine  decreases  in  value.     The  continuance 
of  the  company,  with  a  new  pr.,i)ertv.  seems  the  favonte 
method,   however.     The   Englishman   is  cosmopolitan   in 
his  investments,  and  there  are  sometimes  curious  changes. 
1  bus,  some  > ears  ago.  a  companv  which  had  been  mining 
m   Idaho  gave  up  its  exhausted  jmipertv  and  bought   a 
nune  in  Western   .\ustralia,  still   retaining  its  old  name, 
."^uch  instances  might  be  multiplied. 


■IMORri/.ATlUX 


L'i':{ 


Except  in  FraiKH',  tlurr  sc'tiii>  tn  !)(.■  no  nniforni  rnlc 
as  to  the  manner  in  uliicli  pasnicnls  are  made  to  aniorli- 
zation  fnnds.  The  fairest  and  most  unitorni  method 
seems  to  he  a  tixeil  ehar^e  on  ore  miiiecl.  hased  eitlier  on 
(jiiantity  or  on  vahie,  aeconhiif^  to  the  nature  of  tile  mine. 

In  this  conntr\-  amortization  funds  are  not  usuah  Tiie 
,ij;eneral  practice  is  to  jtay  out  snrphis  in  di\iilends.  leav- 
ing:; cacli  stoc' holder  to  maice  liis  own  amortization,  if 
he  is  disposed  d  >  s(j — usuaUy  he  is  not.  This  is  hased 
on  the  continua.  .ifting  of  stock  ownership.  W  ith  few 
exceptions  the  .American  investor  does  not  huy  mining 
stocks  to  keep,  lie  sells  them  when  he  has  a  chance  to 
make  somethint^.  it  has  been  said  tliat  the  ownersliip  in 
an  American  niininj.;^  company  chanijes.  on  an  avera^'e. 
every  five  years:  and.  <|uite  prohahiy,  this  is  nf)l  far  from 
the  truth.  L'nder  these  circmnstances.  it  is  quite  natural 
tiiat  a  stockholiier  should  prefer  to  j^a't  all  that  lie  can 
out  of  his  sliares  while  he  holds  them,  without  looking 
to  the  future. 

An  exception  is  foimd  in  some  coal  ruid  iron  comjia- 
nies.  Thus  the  Delaware  &  Hudson  Company  includes 
in  its  expenses  a  fixed  sum  per  ton  of  coal  mined,  which 
goes  into  a  fund  which  has  been,  up  to  date,  used  to  pa\ 
off  the  company's  mortgage  bonds.  These  are  now 
nearly  all  retired.  The  Reading  Comi)any  has  done  the 
same  thing  since  its  last  reorganization.  The  Pittshnrg 
Coal  Comjiany  has  a  similar  ch:irge  on  earnings,  the  sU'ii 
thus  set  aside  being  used  chielly  to  buy  !iew  coal  lamls. 
In  the  last-named  case  the  amoinit  has  been  calculated 
on  such  a  basis  that  tiie  fmid  will  rei)lace  the  co;d  l.inds 
mined  out  each  year,  and  so  keep  the  coni|)any  going  as 
long  as  there  are  new  lands  to  he  bought. 

Among  iron  compa:iies.  severa'  of  the  larger  Snutlu-rn 
companies  .ilso  make  a  charge  to  earnings  hased  on  the 
iron  ore  an<l  coal  mined  each  \ear.  The  .Sloss-.'^heffield 
("ompany,    in    addition,    makes    a    charge    of    25c.    for 


21' t 


77//:  I:C(\\OMICS  ()/•  MIMXd 


each  ton  (jf  pis^  iron  mmlf,  tlu'  fund  \k\u^  used  to  renew 
•'s  plant.  'I'lu-  (  )li>i'r  Inm  Cmnpanv.  wliicli  is  the  iron 
niinint,--  liranch  nl  the  I'mtcd  States  Siirl  Corporation. 
Iia>  a  s\><tt,'m  ni  charges  based  on  on.'  niimcl. 

In  nunc  nf  thi'se  cases,  however,  exeejit  tlie  Hehiwart 
ilv  I  ludson.  are  these  funds  apphed  to  reduction  of  capital, 
and  tliey  are  not,  tlierilore,  properly  amortization  funds. 
The  iron  ininint,''  companies  referred  to  also  own  manu- 
facturini,'  plants,  and  it  is  essential  to  their  operation  that 
the  ;>upiily  of  ore,  or  r.aw  materi.il.  should  he  kept  up. 
idle  retirement,  or  reiiaynie'U,  of  capital  i>  not  consid- 
ered in  the  matter. 

t  >n  the  whole.  [  do  not  think  that  .\merican  hu\irs  of 
mining-  !,tock  will  take  kindl\-  to  amortization  funds,  iiti- 
der  present  conditions.  Thex-  prefer  to  trust  to  them- 
selves, and  to  the  eh.ance  of  selliui^  their  stock,  to  allow- 
ins,'  the  company  to  look  after  the  rep.i\inent  of  their 
capital  at  setme  indetiii'te  future  (Lite.  .\s  Ions;  as  thi- 
fc'linqf  lasts  the  practice  of  amortization  can  hardly  ex- 
tend. 

Some  day  we  may  take  time  to  think  a  little  about  it. 

and  then  I  believe  the  justice  and  reason  of  the  plan  will 

be  realized.     .\nd  it  ma\-  do  somethint^  also  to  jiromote 

permanence  and  stability  in  mine  ownershi]) — which  is  a 

thiiiij  nuich  to  be  desire 

F.  Ilnn.vRT. 
.\ew  York,  Mav  lo,  1904. 


VALUATION   OF  GOLD   MINES 

The  Editor: 

SiK — 1  af,'rcc  with  Mr.  Hnnvtr  in  liis  interesting  ar- 
ticle of  May  19,  that  every  mine  is  a  prolilein  in  itself; 
there  are  no  fixed  |)rinci[)les  l)y  which  the  appraiser 
may  he  fjiiided  to  a  definite  and  correct  value  by  the  rules 
of  mathematics.  I'.ecause  if  he  deals  with  averaf,'es,  or 
laws  of  probability,  as  to  the  life  and  profit  of  such  gold 
mines  in  general,  or  even  of  the  mines  in  a  special  dis- 
trict, he  will  as  a  rule  arrive  at  very  erroneous  results. 
It  is  one  of  those  cases  in  engineering  ])ractice  where 
experience,  >kill  and  judgment  are  of  the  utmost  im- 
(xirtaiice  to  get  even  an  api^roximate  solution. 

The  metl  od  which  I  have  found  most  satisfactory  is 
about  as  follows:  Having  correctly  valued  tiie  ore  in 
sight,  the  size,  shape  and  relative  positions  of  the  ore- 
bodies  should  be  mapped  to  scale,  and  compared  with  those 
of  the  exhausted  orebodies  for  at  least  three  years  pre- 
vious. Then,  by  comparison,  try  to  find  the  law  of  contin- 
uity and  value.  Xext,  by  that  law,  t(igether  with  a  study 
of  the  history  of  the  most  developed  mines  in  the  dis- 
trict, decide  on  a  definite  figure  for  the  undeveloped  por- 
tion of  the  mine.  Having  thus  arrived  at  a  definite  value 
for  the  whole  mine,  the  next  question  to  consider  is  the 
econon.ic  ratio  of  development  to  milling  capacity.  Then 
the  gross  profits  in  the  mine  and  the  tiiue  necessary  to 
exhaust  the  same.  Lastly,  an  estimate  should  be  made  of 
the  extra  capital  tiecessary  fully  to  e(|uip  and  develop,  to 
reach  the  economic  ratio.  Having  found  all  these,  the 
extra  capital  should  be  subtracted  from  the  gross  profit, 
and  the  balance  cafMtalized,  so  as  to  yield  10  per  cent 
[)er  anmim  during  the  time  necessary  for  exhaustion,  and 
at  the  same  time  redeem  the  iirincipal. 


\\\  I tcf  ration      lof    11c    tiL-o    tli^ 


W'ocfroi; 


////:  ECO.\UMJlS  Ul'   MIXIXG 


wliiili  Mr.  llnoviT  '-av  >  haw  a  .l,M•<>•^-  jirnl'it  in  sii^'ht  of 
a!)'iiii  i  i(i.(HHi.i)iHi ;  ami  su])])o.sc  tlie  appraiser  aiMs  an- 
i>tlur  tiu.txjo.iM-X)  inr  prutil  in  un(lcvi-l>'i)i'il  grdinid.  Now, 
if  lir  considers  £_'.()oo,ock)  nfccssary  to  jint  those  mines 
on  an  iconoinii.-  ratio,  so  tlial  tlu\  wnild  he  cxhaustc(l  in 
^\o  \i-ars.  then  his  vahiatioii  would  W-  £4.5(x).ono.  instead 
of  £i4.5(Xj.tx>),  as  Mr.   Hoover  makes  it.     I'.ecause  £jo,- 

OOO.OOO  —   £j,CXX),000   =    i  1 8,000,000.       .\nd    ilS,(X)(),000 

c;ipit;di/ed  at  10  per  cent  i)er  :inmnii  for  30  years,  with 
the  principal  redeemed  durin}^  that  time,  is  re])resented 
'  \    £430,000  X  30  +  £4,300,000  =  £18,000,000.  the  total 

,,11  ouiit  of  profit  in  the  proi)ertics  mentioned. 

.Mr.  ih)over  thinks  that  '1  per  cent  is  snfficient  interest 
to  ]);iy  oii  mininL,""  iiivestiiunts,  hut  i  ihiid\  most  enjj^inecrs 
will  ;n.;ree  with  Mr.  (nrle  that  10  pi  r  cent  is  a  fair  fi;.;ure, 
(jver  and  aho\e  the  redi-mption  of  the  principal. 

There  is  ;mother  cniestion  in  the  \ahiation  of  mines  of 
eviTy  kind  whiili  is  of  sut'licient  ini[)ortance  to  he  men- 
tioned here.  And  when  the  time  '-onies  that  I'rof. 
Church  says  otiyht  to  come  if  investors  wish  to  be  pro- 
tected, when  the  president  of  every  miniiiL':  company  is  a 
(lualitied  minintj  eiiLjineer,  then  every  mine  will  be  valued 
aniutally  by  an  indejiendent  enpineer,  just  as  the  books 
are  audited  b\-  an  indepeiiiknt  accountant.  1  trust 
the  Institute  of  Minintr  I'-usj^ineers  will  take  this  matter 
up.  and  havi'  a  law  passed  compellincf  mininpf  companies 
to  have  tluii-  inventories  and  valuations  tried  hv  ;m  in- 
dependent eni^ineer  before  the  auditor  will  accept  them. 

RoHEKT  Stevenson. 
New  York.   May  23.  11)04. 


MINE   EQUIPMENT  AND  ORE-RESERVES 

(June    JJ,     ly('4.) 

I  he  I  Alitor. • 

Sir — 'I'lu'  artii-lf  on  <>rr-rcserves  and  i.iinc  niuipnicnt 
by  Mr.  II.  ('.  llcinviT  covits  tlu  particular  IrM  dis- 
cussed liy  liiiii  with  such  skill  that  it  scciiis  m  mv  tlurc  is 
lint  iiiucli  iiKiri'  tn  say.  I 'iilnrtuuatcly  most  of  us  do  not 
haw  the  opportunity  (.1  nnravclini;  the  problems  \k-t- 
tainini,'  to  the  exploitation  of  .such  niaL,Miificent  mines  as 
those  wliicli  Mr.  l|o(i\er  direct-,  nor  do  we  operate  with 
tlie  reserve  capital  of  such  stronj.^  ccjmpanies  as  those 
with  which  he  is  connected.  The  mininj:::  future  of  this 
coiiniry  ilepends  to  an  ever-iiicreasintj  extent  on  the  jirotit- 
ahle  expluitation  of  relatively  small,  erratic  and  |()w-;L^rade 
depfisits;  in  other  words,  in  inakini,^  Iianl  |)ropnsitions 
pay.  The  West  has  iieen  iirrtty  wdl  run  over,  and  it  is 
jirohalile  that  most  of  the  Iul;  tiiinf;s  are  already  under 
process  of  development;  and  while,  of  course,  some  of 
us  will  he  workin;,'  lionan;^as  for  seviTal  generations,  the 
vast  majority  of  mining;  etii^ineers  will  he  continuallv  up 
aijainsl  a  hard  ijaine.  It  is  the  problems  jicrtainint^  to  the 
successful  o]HTation  of  such  deposits  which  more  vitally 
concern  the  majority.  To  m\  mind  there  is  more  credit 
due  to  those  who  take  up  the  hard  propositions  and  make 
them  pay  than  to  those  who  exploit  bonanzas  alon,cr  finely 
scientific  lines;  the  first  usually  re(|uire  energy,  satjacity. 
perseverance  and.  very  often,  iltiring;  while  the  other 
need  chiefly  cool  calculation.  Tlie  acquirinpf  and  early 
development  of  the  Ivinanza  is  a  flitTerent  matter;  in  this 
achievement  much  the  same  c|ualities  are  called  fir  as  in 
the  operation  of  a  hard  proposition.  But  onlv  a  few  of 
Us,  as  already  stated,  will  ever  have  the  opportunity  to 
acf|uire  a  bonanza  for  ourselves  or  clients,  so  we  may  just 


'_'L'S 


////■.  /:cu.\o.V/i  .s   (;/•  Ml.\/\(, 


as  well  liKik  llir  tact--  m  tlk-  liu  c  anil  cnnsi.kT  tlii.-  i)Pih- 
k-tus  inciiknt  u-  tliu  ciHralinn  (.f  tliai  larjje  class  of  de- 
posits uitli  uliii.li  most  of  Us  arc  more  or  less  directly 
associati'il.  In  stioli  cases  tlk  aiiiortization  nf  the  eriiiip- 
iiu'iii  iiecnmes  an  even  more  serious  pioliKiii  than  mi  the 
nistanees  discusseil  by  Mr.  Hoover,  for  it  Ih'couks  doubt- 
fnl  ulietlier  the  expenditure  will  ever  be  amortized  at  all, 
rather  than  a  qiu -non  of  how  niaiiv  months  will  be  re- 
ipiired  to  j^et  even.  And  yet  onditions  of  operation,  as 
they  e.xist,  often  force  an  expenditure  for  eiiuipment  be- 
fore one  can  lii^Mire  the  ore  reser\e  to  iustif\  it.  It  niav 
be  neces.sary  to  e(Hiip  .and  be^'in  production,  or  cpm  alto- 
^'ether.  In  such  cases  1  think  .i  man  is  jnstifi<(l  in  usin:,' 
the  most  temporary  expedients,  r.ither  than  m  jirovidm;.,' 
such  an  e(|uiprnent  as  would  be  ealled  for  if  a  loiij,^  eam- 
l)aiL:;n   were  ;utti.illy  assured. 

It  has  been  my  observation  that  more  mines  are  killed 
by  too  much  e(iuipnient,  and  ill-advised  ecjuipment,  than 
fmm  errors  in  the  opposite  direction.  Tiie  tendency  to 
make  lar<j;e  expenditures  to  assure  ;i  low  working-  cost 
per  ton  has  been  at  the  iKittom  of  man\  a  ininiiiL;  f.iihire, 
because  the  hard  facts  of  the  limited  number  of  tons 
available  and  the  utter  v.orthlessncss  of  abandoned  mine 
ecp.iipment  were  both  entirely  overlooKed.  The  sure  loss 
of  operatin.ij  with  inefficient  eiiuiiinient  and  the  possible 
loss  of  expemlino;  to,-,  much  on  equipment,  present  tlie 
Scylla  and  (  har\lidis  of  this  feature  of  mine  nianaj,^'- 
mcnt;  the  admirable  siiiling  chart  compiled  by  Mr. 
Hoover  will  yuide  the  bio;  steamers  with  scientific  accu- 
racy: but  the  [iilot  of  the  little  s;ii]ini.,r  vessel.  (lri\en  by 
tickle  -.vinds  and  diverted  by  unseen  currents,  cannot  fol- 
low the  directions,  and  under  such  conditions  success  is 
the  more  .adniirablc  and  failure  the  nir,re  pardonable 

It  seems  to  me  that  the  qnestion  incident  to  providing 
the  ordinary  mine  with  equipment  does  not  permit  nf  any 
very   extemled    discussion,   along   general    lines,   because 


I 


ORE-RESERll-.S 


229 


nearly  cvorv  mine  has  itscwii  iii(li\  idiial  pn  Jilcni,  and  those 
that  haven't,  fall  without  (jiK-stion  nndi  r  Mr  Hoover's 
rule;  hut  there  is  an  infinite  variety  to  tlir  prohienis  con- 
f'-ontinp  the  averaj,'t.  inun  niana^'er,  and  the  successful 
solution  of  hard  prohlcius  of  nianapenuiit  make  the  basis 
of  what  is  to  many  of  us  the  most  interestin;.,'  forn.  of 
mininp  literature.  The  consideration  of  the  difficulties 
that  have  beset  our  t\li..\\s  and  of  the  niean>  tlicv  adopted 
to  overcome  them  is  sure  to  be  of  practical  service  sooner 
or  later:  and  in  the  hope  that  I  may  Ik-  able  to  start  the 
liall  .a-rolhntr  in  thi-  direction.  I  will  mention  tiirce  in- 
stances out  of  my  personal  experience. 

The  estate  of  W.  .S.  .Stratton.  deceased,  included  some 
;i3  acres  of  territory  in  the  Cripple  Creek  district  of  Col- 
orado. There  is  litile  of  this  territory  from  which  there 
has  been  no  shipment  of  ore.  and  some  parts  of  it  have 
made  a  larpc  production.  The  pay  ore  is  found  in  iso- 
lated bodies  scattered  throuoh  a  perfect  network  of  veins, 
contacts,  and  mineralized  dikes.  The  prade  of  the  ore  at 
(  rifiple  Creek  is  comparatively  high,  so  that  a  relativelv 
-mall  oreliody  may  he  of  considerable  economic  impfir- 
tance.  As  a  ionsc<inence  of  ilu'si-  conditions,  the  problem 
of  findinfj  the  ore  very  much  overshadows  anv  other 
problem  in  the  ixiiloitation  of  these  deposits.  The  suc- 
cessful 'ore-tinder"  is  'he  man  who  makes  an  exhaustive 
study  of  a  tjiven  ku  ity  and  then  watches  every  little 
indication  as  n-ork  proj^resscs.  The  failure  to  follow  off 
into  the  wall  the  smallest  strinper  that  assays  mav  mean 
the  loss  of  a  j,'ood  orcbody.  The  most  successful  "ore- 
tinders'  in  the  camp  are  the  small  'leasers,'  whose  self- 
interest  calls  forth  a  degree  of  astuteness  and  careful 
attention  to  detail  which  is  not  obtainable  in  a  paid  force. 
Therefore.  I  recommended  that  the  territorv  which  was 
not  developed  by  deep  shafts  should  be  leased  in  surface 
blocks,  and  that  a  large  part  of  the  territory  that  was  de- 
veloped by  deep  shafts  should  be  let  on  the  tribute  sys- 


!i 


ll 


'2:u) 


THE  ECONOMICS  OE  MIMNG 


Icm.     Tliis  plan  has  been  slowly  put  into  effect,  and,  thus 
far,  the  results  are  highly  satisfactory. 

At  the  Golden  Cloud  mine  in  Montana  the  vein  is 
small,  remarkably  continuous  and  of  exceptionally  uni- 
form value.  The  average  grade  is  $25  per  ton  m  gold 
and  the  property  is  equipped  with  a  good  mill.  The 
quartz  is  soft  and  frozen  to  the  walls,  and  the  problem 
to  be  solved  Vvas  how  to  mine  tnis  ore  cleanly  at  a  cost 
sufficiently  low  to  leave  a  margin  of  profit.  When  work- 
ing on  diy's  pay  the  miners  found  the  quartz  very  nice 
drilling  ground  and  shot  it  all  to  pieces,  so  I  put  them  or 
a  contract  system  whereby  each  pair  of  men  had  a  certain 
block  of  ground  and  were  paid  so  much  per  ton  of  clean 
quartz  delivered  at  the  mouth  of  the  tunnel.  The  svstem 
has  proved  satisfactory  thus  far. 

At  the  Cornucopia  mine  in  eastern  Oregon  in  1896  the 
principal  problem  to  be  solved  was  the  successful  milling 
of  a  rebellious  ore.  Mr.  T.  A.  Rickard,  as  consulting 
engineer,  was  in  control  of  operations.  My  position  was 
a  subordinate  one.  The  ore  carried  part  of  its  values  as 
free  gold,  part  as  silver,  gold,  copper  ind  lead  in  pyrite 
and  part  as  telluride  of  gold.  When  Mr.  Rickard  took 
charge  there  was  a  20-stamp  mill  on  the  ground  equipped 
with  si.x  vannc-s,  the  pmduct  of  which  was  chlorinated, 
with  a  heavy  loss,  mainly  in  the  roasting  stage  of  the 
process.  This  loss  had  been  undetected  by  reason  of 
stupidity  in  calculations,  which  failed  to  allow  for  the 
decrease  in  weight  by  elimination  of  moisture  in  roast- 
ing. .The  shipment  of  tlie  concentrate  to  the  smelter  at 
Tacoma  gave  larger  profits,  hut  even  then  the  extraction 
was  poor,  by  reason  of  the  values  escaping  in  that  part  of 
the  tailing  whicli  would  pass  a  loo-mcsh  screen. 
Mr.  Rickard  and  Mr.  Harnhart.  the  superintendent,  then 
decided  to  introduce  hyciraulic  separators,  two  more  van- 
iicrs  and  a  canvas  slime  plant,  so  that  the  extraction  was 
increased  from  65  per  cent  to  85  per  cent,  and  the  mine 


ORE-RESERVES 


2.T1 


became  a  profitable  enterprise.  The  essence  of  this  suc- 
cess was  not  only  in  the  improved  extraction  which  was 
attained  at  every  step  of  the  milling  process,  but  in  a 
general  reduction  of  working  costs  carried  out  by  the 
superintendent. 

Seattle,  Wash.,  June  lo,  19C4. 


Geo.  J.  Bancroft. 


THE    ECONOMIC  RATIO  OF  TREATMENT 
CAPACITY  TO  ORE-RESERVES 

The  Editor: 

SiR-L-„,lcT  the  al)ovo  hoadinij  appears  an  article  bv 
^ir.  11.  L.  H(xn-er  in  your  issueof  March  24.  As  this  sub- 
ject forms  ,,„e  ol  the  most  important  of  tlie  financial 
problems  u.tii  which  the  engineer  has  to  deal,  it  would  be 
advantageous  to  have  it  fully  discussed  and  ventilated  by 
men  m  different  parts  of  the  world,  and  I  put  that  view 
forward  as  my  excuse  for  the  remark-  that  follow. 

1  he  general  impression  maJe  upon  mv  mind  after  care- 
fully reading  through  Mr.  Hoover's  article  is  that  while 
keeping  the  main  issues  well  in  view,  he  is  somewhat  ob- 
scure as  to  the  basis  of  his  reasoning,  and  as  to  the  manv 
contingencies  for  which  provision  must  be  made  before 
the  well-known  maxims  which  he  expounds  can  be  prac- 
tically employed.  It  may  therefore  be  well  to  further  dis- 
cuss some  of  the  questions  he  has  raised,  with  a  view  to 
greater  elucidation  and  further  suggestion. 

Mr.  Hoover  states  as  a  preliminary:  "Starting  with  an 
assumption  of  unbroken  continuity  to  their  utmost  boun- 
daries, our  South  African  friends  need  but  little  outside 
of  compound  interest  tables  upon  which  to  found  their 
hnarice.  In  the  great  majority  of  mines,  however  the 
result  of  <levelopment  at  their  lowest  levels  remains  spccu- 
lat.ve  and  gives  a  zest  such  as  an  assumed  persistence 
can  never  atford  "  It  seems  to  me  that  Mr.  Hoover  has 
inibibed  the  popular  idea  that  the  art  of  mining  on  the 
Kand  IS  conducted  upon  such  simple  lines,  owing  to  nat- 
ural conditions,  that,  as  he  says,  "our  South  African 
friends  need  but  little  outside  of  compound  interest  tables 
upon  which  to  found  their  finance."  It  should  be  under- 
stood by  engineers,  at  least,  and  I  affirm  it  now,  that  the 


()Rr.-Ri-:si-:h'ii:s 


233 


mines  of  the  Rand  are  subject  to  as  extreme  fluctuations 
in  value  as  deposits  of  any  other  kind,  and  tliat  it  is 
e(|ually  necessary  on  tliese  fields  to  develop  skilfully  and 
far  in  advance  of  the  mill  as  upon  any  other  goldfield,  if 
any  knowledge  of  the  conditions  jjovcrninj;  the  problems 
discussed  by  Mr.  Hoover  is  to  be  acquired. 

The  essentia!  difference  between  the  f^and  'banket'  beds 
and  metalliferous  deposits  of  dififerinp  orij;in  is.  that  in 
the  former  we  are  not  called  upon  to  contemplate  the 
complete  disappearance  of  our  values  within  the  limits 
so  far  worked — a  contingency  which  always  has  to  be 
reckoned  with  in  other  forms  of  deposit.  It  is  just  as 
necessary,  however,  that  reserves  should  be  well  ahead 
of  mill  requirements  for  the  consideration  of  the  question 
of  the  ratio  of  treatment  to  ore  reserves;  .  therwise  for 
one  period  the  mines  would  be  earning  large  profits,  and 
for  another  they  would  be  working  at  a  loss.  On  the 
Rand,  equally  with  other  fields,  we  must  consider  the 
possible  rate  of  development,  which  is  governed  by  the 
facilities  for  attack,  the  ore  exposed  per  foot  driven,  and 
the  percentage  of  payable  ore  to  the  total  developed. 

In  some  sections  of  the  Rand,  the  reef  averages  less 
than  6  in.  wide  ;  and.  if  in  such  cases  the  proportion  of 
payable  ore  is  as  low  as  30  per  cent,  and  if  the  develop- 
ment scheme  is  rendered  bad.  as  is  the  case  in  some  in- 
stances, by  faults  or  dikes,  then  it  is  clear  that  the  plain 
sailing  which  Mr.  Hoover  believes  is  an  essential  condi- 
tion (if  mining  work  here,  is  an  erroneous  conviction. 

In  the  second  paragraph  of  his  article  Mr.  Hoover 
states  "that  the  most  economical  and  profitable  treatment 
capacity  is  the  maximum  capacity  which  can  be  employed, 
is  not  difficult  to  demonstrate:  that  the  maximum  must 
depend,  however,  upon  the  speed  of  development.  :\':d  that 
the  speed  of  development  must  be  pushed  as  fast  as  the 
limitations  of  nature  will  permit,  is  but  to  state  a  corol- 
lary.     Yet.   curious   as   it    seems,    the   ntunber   i.f   mines 


234 


Tl!F.  nCO\'OMICS  OF  MIMXG 


wliich  have  ben  Dpcratcd  iipnn  the  principle  that  the 
mill  is  the  fixed  (|uaiuity  and  the  mine  the  variable,  ex- 
ceeds the  number  conducted  upon  the  reverse  plan."  This 
sentence  aptly  illustrates  my  view  as  to  the  obscurity  of 
Mr.  Hoover's  basis  of  reasonin.ij.  The  statements  are  en- 
tirely true,  but  there  is  a  variety  of  principles  involved 
which  cannot  be  tluis  settled  by  a  stroke  of  the  pen. 
I'irstly,  we  must  consider  the  financial  status  of  the  com- 
pany operating;:,  as  to  whether  it  is  in  a  position  to  make 
the  monetary  arrantjenicnts  necessarily  involved  in  a 
scheme  for  expansion.  Let  us  take  a  case  as  an  example. 
.\ssume  a  company  owning  a  property  which  re(|uires 
£5oo,cx)0  L^  oring  it  to  the  producing  stage  on  a  basis  of 
loo  stamps.  To  find  such  a  sum  of  money  might  not  only 
exhaust  all  the  cash  resources  of  the  company,  but  cause 
it  to  overdraw  to  the  extreme  limit  of  its  credit.  Let  it 
be  assumed  that  the  company  has  conmienced  milling 
and  is  earning  profits.  It  is  now  suggested  that  it  should 
accept  Mr.  ilix)ver's  dictum  "that  development  must  be 
[jushed  as  fast  as  the  limitations  of  nature  will  permit." 
To  carry  out  tlie  suggestion  cMie  of  the  following  alterna- 
tives might  be  adopted:  either  a  loan  to  cover  excess  de- 
\elopment,  or  profits  miglit  be  utilized  for  the  purj^ose  of 
extra  development.  As  the  company  is  assumed  to  have 
no  further  credit,  it  cannot  adopt  the  first  alternative,  and 
for  the  same  reason  in  this  instance  it  would  not  be  likely 
to  adopt  the  second.  The  further  view,  that  current  profits 
should  be  utilized  for  the  benefit  of  the  later  sharehold- 
ers, would  also  be  contested  by  the  present  shareholders, 
who  naturally  would  want  a  cash  distribution  as  soon  as 
such  was  available. 

In  this  instance,  therefiTe,  although  Mr.  Hoover's  dic- 
tum is  in  every  sense  correct,  it  would  be  impossible  to 
accept  his  policy.  The  basis  of  reasoning  must  therefore 
include : 

1.  Financial  cretlit. 


ORB-RI'-SliRlT.S 


2'^^. 


2.  An  aprccd  basis  i)f  arrangement  as  to  the  manner  in 
which  the  capital  will  be  raised,  namely: 

(a)  Whether  as  a  direct  loan. 

(b)  By  the  issue  of  reserve  shares. 

(c)  By  the  utilization  of  current  profits. 

(d)  By  increasinj?  the  company's  capital. 

As  he  leaves  the  reader  to  guess  these  alternatives  it 
has  seemed  to  me  pertinent  to  mention  them. 

Mr.  Hoover  well  remarks,  in  the  concluding  sentence 
of  the  ([notation  I  have  maile,  that  the  mill  is  in  genera! 
regarded  as  the  fixed  (piantity  and  the  mine  as  tiie  varia- 
ble.   In  my  'Deep  Level  Mines  of  the  Rand,'  it  was  shown 
that  if  a  company  running  a  200-stamp  mill  on  a    nine 
with  a  20-ycars'  life  earned  an  annual  profit  of  £330.000. 
the  present  value  of  the  total  profit  ai  £6.720.000.  allow- 
ing 6  per  cent  for  dividends,  and  3  per  cent  for  amortiza- 
tion of  capital,   would  be  £3.456.76^-     !'■  however,  the 
total  amount  of  £6,720.000  is  discounted  as  a  yearly  divi- 
dend of  £672,000  for  ten  years  on  the  same  basis  as  be- 
fore, the  present  value  of  the  amount  becomes  £4.564.224. 
or  £1.107,456  greater  than  the  same  amount  earned  m  a 
20-year   peiiod.      In   other   words,   if   the   milling   equip- 
ment is  increased  at  intervals,  and  the  mine  worked  out  in 
ten  vcars  instead  of  twenty  years,  the  net  gain,  even  after 
allowing  for  extra  expenditure  for  increased  equipment, 
in  the  instance  taken,  is  materially  increased. 

It  is  difficult  to  get  the  financial  controllers  of  mines 
always  to  follow  the  engineer  in  this  respect.  They  ob- 
ject that  there  is  a  cot.„tant  shifting  of  the  financial  basis, 
while  there  is  new  equipment  to  be  erected,  and  excess  de- 
velopment to  be  accomplished,  and,  strangely,  they  have 
a  sentimental  liking  for  a  longer  life,  which  has  the  one 
element  of  possible  participation  in  improved  working 
conditions  to  recommend  it.  If  the  engineer  can  see  be- 
forehand that  the  property  to  be  worked  is  one  likely  to 
lend  itself  to  a  scheme  of  this  kind,  he  can  suggest  to  the 


-'.'!0  THE  F.COXUMICS  OF  MIXIXG 

financial  iicads  the  pruvisiuii  ,<i  reserve  shares,  wliicli  can 
be  issued  imm  time  to  time  tc  meet  the  capital  require- 
ments, and  thus  the  current  earnings  of  the  mine  are  not 
diverted. 

Mr.  Hoover  says:  "We  now  divide  the  various  charges 
against  working  expenses  into:  First,  those  charges  vari- 
able with  tonnage,  such  as  development,  haulage,  treat- 
ment, etc. ;  and  .second,  those  charges,  usually  referred  to  as 
•fixed,'  which  dei)end  partially  upon  the  element  of  time 
as  well  as  tonnage,  and  include,  partially  or  wholly,  pump- 
mg,  management,  amortization  of  capital  invested,  etc." 
-Mthough  not  entirely  relevant  to  the  subject  under  int- 
mediate  discussion,  some  remarks  upon  this  and  kindred 
iieads  may  not  be  out  of  place.  The  development  charge 
on  a  mine  is  one  susceptible  of  very  diverse  treatment. 
There  are,  however,  two  methods' which  are  legitimate, 
and  properly  suit  special  conditions.  The  variation  in  the 
conditions  arises  out  of  a  (juestion  of  policy,  which  again 
may  be  dictated  by  the  financial  resources  at  command. 
(  )ne  engineer  may  recommend  that  the  mine  be  developed 
I'T  a  mill  of  fixed  capacity  and  to  such  an  extent  before 
milling  beg:  .s,  that  there  will  be  no  subsequent  necessity 
to  develop  at  a  more  rapid  rate  than  the  mill  require- 
ments, that  is  to  say.  the  total  ore  reserves  are  practically 
unchanged.  In  .such  a  case  the  cost  of  development  is 
rightly  charged  to  working  account  as  a  lump  sum.  I'\)r 
the  same  property  as  above  assumed,  another  engineer 
may  recommend  development  of  the  mine  on  a  com])ara- 
tively  low  basis,  and  two  years  ahead  of  the  mill.  He 
may  (|Uestion  the  soundness  of  a  policy  of  sinking  large 
capital  sums  in  development  work  many  years  ahead  of 
re(|uirement,  because  the  interest  on  the  sum  should 
rightly— although  in  practice  it  is  not— he  charged  against 
the  developed  ore. 

.After  the  mill  ^^tart?.  the  policy  laid  down  provides  for 
rapid  excess  developnu'iit  and  periodical  increases  to  the 


ORfi-RIiSF.Rrr.S 


equipment,  for  wliich  policy  tlio  necessary  financial  pro- 
vision lias  been  made.  As  the  rate  of  development 
inij^ht  easilv  absorb  the  total  workinij;  profits,  the  latter 
arc  not  diverted,  but  the  de\eloi)ment  work  is  paitl  for 
out  of  the  capital  each  month.  At  the  •  nd  of  the  year  the 
accounts  arc  made  up  and  it  is  found  that.  say.  20o.cxX) 
tons  of  ore  have  been  developed,  costin;,'  £5o,(X>o.  The 
working  charge  per  ton  milled  would,  therefore,  be 
debited  with  an  amount  of  5  shillings  per  ton— the  cost 
to  develop-  -in  order  to  gradually  redeem  the  development 
at  cost. 

The  question  of  amortization  of  capital  in  a  mining 
undertaking  is  a  very  difficult  one,  and  I  cannot  follow 
Mr.  Hoover  in  his  view  that  it  should  be  made  a  fixed 
charge  against  working  costs.  Amortization  can  only  be 
fixed  on  a  definite  knowledge  ot  the  profitable  term  of  an 
undertaking.  If  a  mine  be  figured  to  have  a  life  of  ten 
vears,  and  it  ultimately  proves  to  have  twenty,  or  vice 
versa,  the  charge  for  amortization  will  in  the  first  in- 
stance have  been  too  heavy,  and  in  the  latter  too  light.  The 
best  principle  is  that  the  company  should  not,  as  a  com- 
panv,  attempt  to  amortize.  The  value  of  its  shares  on  a 
given  earning,  on  the  basis  of  amortization  of  capital  or 
otherwise,  can  be  readily  computed  by  the  investor.  If 
the  companv  puts  aside  an  annual  amount  as  amortization, 
it  naturally  reduces  the  distributable  profits,  and  these 
might  possibly,  if  distributed  in  full  to  the  shareholder, 
be  reinvested  by  him  with  immediate  benefit.  Moreover,  if 
investors,  who  bought  interests  in  the  earlier  stages  of  the 
mine,  sold  out  at  a  later  date,  the  profits  which  they  should 
have  received  would  accumulate  to  tb.e  advantage  of  the 
investor  who  bought  during  the  later  stages  of  the  com- 
pany's caicr,  and  thus  tlie  former  would  be  at  a  disad- 
vantage, unless  the  market  appreciation  of  the  company's 
policy  of  amortization  were  fullv  reflected  in  the  share 
value  throughout.     It  should  be  the  business  of  the  share- 


i.»;!s 


I  lir.   liCOXOMICS  ()!■   MIX  IXC 


Imlik-r  in  lli^  iii(livi<liial  i'a[);icity  tci  aiiinrtizc  liis  iiivt'st- 
iiu'iit,  liut  nut  tliat  of  tlic  i.-niii])aiiy  in  it,-,  cnrjioralc 
capacity. 

Mr.  Hoover  says:  'in  tlic-T  cases  less  tlian  liircc  vcars' 
accumulation  of  the  increment  of  prolus  is  reijiiireil  to 
amortize  the  entire  capital  involvxl."  lie  does  not  ix- 
jilain  how  lie  will  deal  with  the  amorti/ation.  If  it  is 
written  off  profits,  the  future  shareholder  henefits  to  the 
prejudice  of  iju'  preseiU.  and  there  is  a  reduction  of  divi- 
dend for  that  p.eriod  which  ni;iy  ;itTect  the  price  of  the 
slock.  If  the  secondary  e(|uipment  he  paid  for  out  f)f  cap- 
ital the  earniuijs  on  the  j,;reater  capital  sum  entailed  must 
he  Considered. 

I  cannot  follow  Mr.  IIoo\er  in  his  treatment  of  amor- 
tization of  outlay  on  plant.  I  take  it  that  a  good  plant 
on  any  mine  has  a  life  of  not  less  than  seven  years, 
and  with  proper  care  and  .sound  maiiilenance  much 
lon,!,,rer.  Let  it  he  taken,  however,  at  seven  years.  Xow, 
if  the  cost  of  i)laiit,  as  su^.Ljested  hy  Mr.  Hoover,  is  writ- 
ten off  in  three  years,  there  WDuld  ap])ear  to  he  a  loss  on 
the  transaction,  unless  the  added  profits  will  ample  com- 
pensate for  the  potential  loss  in  plant.  The  t'isjures  as  he 
f^ives  them  show  only  ahout  a  similar  net  result,  in  the 
cases  of  the  jirimary  and  secondary  ec|uipments,  after 
deiluetin-;  the  capital  outlay  on  the  latter.  The  sole  ad- 
vantage would  then  he  the  difference  in  the  present  value 
of  the  ultimate  [irofit  earned,  and  if  we  take  it  that  this  is 
£ioo.o<xi,  the  advantage  of  earning  it  in  three  vears  in- 
stead of  ,six  represents,  on  a  hasis  of  h  per  cent  for  divi- 
dends and  3  per  cent  for  amortization.  £().2io.  Mr. 
Ilmver  takes  it  that  on  the  primary  hasis  a  three  vears' 
reserve  should  he  figu'-ed  uj)on.  If  the  development  in- 
creased ,so  rapidly  that  a  six  years'  reserve  is  huilt  up 
(although  he  does  not  suggest  how  he  arranges  his  finances 
in  the  meantime),  then,  if  f  read  him  aright,  he  would  add 
secondare  e(iuinment  to  such  an  extent   ns  to  make  the 


Ok'll-RP.SF.RrrS  'J:'.!> 

resiTVf  a-ain  three  year..  I'.ut  supi^nMiii;  that  n.,  nmre 
pavahle  ore  were  (Hsenvered.  then  it  seetn^  on  hi^  own 
sliuwinj,'  that,  saving  the  aspect  nf  tlie  increased  pre-uit 
vahie  of  the  profits,  there  is  no  special  advaiita-e  in  the 

scheme. 

Suppose,  for  instance,  we  have  a  loo-stanip  nnU  which 
crushes  i6S.r)00  tons  iier  annnm.  A  reserve  of  six  years 
for  sticli  a  mill  ^vnul(l  he  i.ooS.ooo  tons.  Now.  if  we 
hnild  another  too  stamps  an<l  utilize  the  increment  of 
profit  to  amortize  the  outla>  we  get  a  result  somewhat  as 
fcjllows : 
Cost  of  lOO  stamps,  'secondary  equipment,'  and 

all  accessories,  including  power,  etc £100,000 

.Additional  water  supply,  pumps,  etc 10,000 

Additional  buildings,  quarters,  etc j 'Q'""" 

Total   ■^•'°'°^ 

Assume  profit  on  the  100-stamp  basis  to  be  10  shillings 

per  ton. 

Assume  profit  on  the  joo-stamp  basis  to  be  12|  shillings 
per    ton.    the    increment    of    profit    due    to    adding    100 
stamps  is  ; 
Total  profit  earned  on    100-stamp  basis   in   six 

years,  1  ,oof<.ooo  tons  at  10s.  per  ton £504,000 

Total  profit  earned  on  200-stamp  basis  in  three 

years,  1,008,000  tons  at  i2^s .     630,000 

Total  increment  of  profit £126,000 

Total  cost  of  secondary  equipment 120^000 

■n    1  „,^Cf  •  .  £6,000 

Balance,   profit 

Tf  interest  be  added  to  the  capital  outlay  incurred  for 
tlK.  sccondarv  eriuipment,  the  balance  shown  will  dis- 
appear. 

In  mines  of  uncertain  continuity  in  <lepth  it  would 
therefore  appear  necessary  to  make  a  more  conservative 


•2li) 


THE  IiCOXOMICS  01'  Mi.\:.\\; 


ratio  iif  t>(iui|iiiu'nt  to  ori'-ri'MTVc  than  that  nu'iitiniicd 
liy  Mr.  Ihovtr.  It,  a-.  1  haw  siiL;j^(.'>t<.'(l,  the  pavaljlu  ore 
were  Miildeiily  to  ^ive  out  when  Mitticteiit  reserves  to 
provide  an  increment  of  i)rotit  that  would  just  amortize 
the  capital  outlay  iti  additional  jilant  had  heen  secured, 
then  the  inme  uould  p<i^>il)ly  he  prejudiced  in  the  lollow- 
xujr  way.  All  mines  are  found  in  jjractice  to  contain  the 
ore  in  shoots,  streaks,  pockets  or  patches.  As  the  wurk- 
i'l.i^s  pro<,'ress  it  becomes  clear  that  a  jirocess  of  selection 
lias  hicn  in  practice,  hy  which  ore  falling  below  a  certain 
standard  in  j.;raile  is  allowed  to  remain  in  the  mine.  The 
lon.i^^er  the  mine  is  workul  the  f^reater  becomes  the  a).jf;re- 
.t,'ate  tonnaj,'e  of  more  or  less  developed  ore  of  a  fjrade  fall- 
iiii,'  helonj^-  the  arbitrary  limit  of  payabilitv.  It  is  a  truism, 
however,  that  in  every  mining  field  the  costs  of  production 
vary  directly  with  the  ape  of  the  tiold  :  in  other  words, 
there  is  a  practically  continuous  reduction  in  costs  year 
hy  year.  In  the  instance  I  have  previously  assumed  of 
a  nunc  havinp;  a  final  reserve  of  six  \ears'  payable  ore  on 
a  'primary'  basis,  it  is  probable  that  large  (luantities  of  ore 
left  in  the  mine  which  are  unpayable  during  the  tirst  of 
the  final  six  years  would,  through  decreasing  costs  of 
liroduction,  imiirovcd  methods,  whether  mining  or  metal- 
lurgical, fall  within  the  limits  of  profitable  working  before 
the  tirst  \i'ar's  work,  and  therefore  the  mine  would,  under 
these  conditions,  secure  a  new  lease  of  life,  on  ore  of  a 
grade  which,  if  worked  out  in  a  three  vcars"  period  would 
still  be  tmpayable,  despite  the  lower  operating  costs  of  an 
increased  installation.  There  should,  therefore,  be  a  big 
margin  of  increment  of  [irotit  allowed  over  and  above  thv- 
amortization  of  plant  amount,  and  even  then  I  doubt  if 
the  scheme  is  a  satisfactory  one,  notwithstanding  that  the 
objects  aimed  at  arc  undoubtedly  desirable, 

It  appears  to  me  obvious  that  in  mines  of  uncertain 
continuity  in  depth  there  can  be  a  definite  and  satisfactory 
basis   of  ratio  of   enuiiMnenr    to   ore-reserves   est.Thli«li..d 


i 


ORl:RliSEl<ll-.S 


241 


hut  nil  .-i  plan  (litTcru-.t  m  thai  pmiKj.scd  by  "^'r.  Hoover, 
riu-  coiulitions  of  .siuli  iniius  call  for  very  advanced 
developnu'iit,  not  only  to  enalile  tlieir  luture  possibilities 
to  l)e  ^;anj;e(l,  but  to  put  the  operators  in  a  position  to 
averaj^'c  iij),  over  the  uidest  i)os>iMe  area,  the  grade  of 
the  ore  developed,  in  order  that  steady  outputs  may  be 
niaintanied  I'urther,  by  such  a  scheiii'  it  is  possible  to 
include  a  larjj;e  tonnage  of  ore  near— but  just  below — the 
arbitrarv  limit  of  payability,  which  w'iuld  inevitably  be 
mitouched  if  the  ninies  were  worked  on  narrow  margins 
of  development. 

After  all,  the  whole  matter  under  discussion  rests  upon 
the  courage  and  resources  of  those  who  control  the 
finances  of  the  company,  {"very  engineer  has  experienced 
a  difiliculty  at  some  time  or  other  in  ])ersuading  the  finan- 
cial heads  of  a  mining  business  to  carry  devehipment  even 
one  year  ahead  of  the  mill,  owing  generally  to  shortness 
of  funds.  If  they  can  be  persuaded  to  follow  the  advice 
of  the  engineer  1  In  icve  the  right  policy  to  be  the  fol- 
lowing, which  1  submit  with  all  deference: 

It   is  assumed  that  preliminary  prospecting  has   been 
'  finished  and  a  scheme  for  permanent  work  is  to  be  pro- 
vided. 

First  Step. — The  mine  to  be  opened  out  for  examina- 
tion, to  such  an  extent  that  data  for  a  sound  development 
policy  can  be  forimilated. 

Second  Step. — .\  development  policy  framed,  including 
estimates  of  cost;  time  to  carry  it  out:  and  probable  ton- 
nage and  value  of  ore  that  will  be  opened  up. 

Third  Step. — bVoni  the  information  to  be  gained  as 
the  development  nroceeds,  a  justifiable  limit  for  ore-re- 
serves to  be  fixed,  taking  into  account  all  the  variables  of 
width  of  reef,  percentage  of  jiayable  ore  per  ICX3  ft.  driven, 
and  facilities  for  attack. 

Fourth  Step. — A  mill  of  a  capacity  fixed  by  the  limit 
of  ore  reserves  to  be  erected,  which  reserves  should  not 


Ill: 


L'Jl' 


J  III:  i:c().\(KMics  oi-  .\//.\7.vc; 


bi'  K'-'>  than  ilu'  tiital  ulucli  tin.-  null  wculil  i.ru>li  if  wurkdl 
C(iiitiiitii  iu^ly    fur   two   u-ar>. 

1- If  lit  Sti-p. — Di-vcldiiiiii'iit  t>i  hi'  i-niitiinii'il,  at  K'ait  at 
tlk-  iiiilliiii,'  rate,  (in  payahk'  (jrc 

l'(ir  till'  tiiiic  hi'iiij^  thi'^i'  ail'  all  tin-  ^tl•|)-  whii-li  in  a 
sdund  ])iilic\  can  hi'  I'l  irimilatnl.  1  hi'  iiiim-  now  \\(iri%> 
sti'adilv  alicail  for  a  couiilc  of  yiars  (niori-  or  k's.s,  a^  the 
ciri'urn^tanci'S  (k'ciilc )  provo  ii>  ahility  to  make  a  j)ri)fit 
on  ilii>  ha-i>.  ami  ilii'  (|iii>tinn  of  lurtlu'r  additions  is 
Mi^'Kotc'd  hy  the  cnj^incir.  ilcforc  tlii-M'  additions  can  he 
a,i;Tei'd  upon  hy  the  tinancial  heads  they  nnist  settle  the 
details  of  the  M-heiiie  hy  which  they  iirojiose  tt/  finance, 
which  will  lie  one  of  the  following,': 

A.  Diversion  of  current  profits. 

!!.  Temijorarv  kian  to  he  paid  liut  of  profits,  over  an 
extended   period. 

I'.   Increase  of  capital  of  the  conii>any. 

I).   Issue  of  already  existinjx  reserve  shares. 

<  )f  these,  the  last  named  is  in  my  f)pinion  undonhtedly 
the  soundest  and  most  e(iuiiahle  to  all  shareholders,  for 
reasons  which  I  have  explained  luany  times  in  other 
writinujs. 

Sixth  .V/i'/-. — The  cnpneer,  havinpj  gained  by  experi- 
ence a  full  knowledge  of  the  mine  and  it-  capabilities, 
suggests  that  develo[imeiit  sbouk'  be  advanced  at  such  a 
rate  that  the  excess  tonnage  of  payable  ore  (over  and 
abo\c  tiiat  re(|uired  to  maintain  a  .stipulated  reserve  for 
the  ])riniai  >•  e(iuipmein  )  should  at  the  end  of  a  given  period 
allow  for  a  hheral  margin — say  six  years — on  an  addi- 
tional unit  of  reduction  and  treatment  plant.  Assume  that 
the  primary  unit  i>  50  st;mip>  with  a  three  years'  reserve 
of  252.000  tons  of  ori',  aiul  assume  the  first  addition  to  be 
10  stamps,  re(|uirir,g  a  reserve  on  a  six  years'  basis  of 
100.000  tons,  then  when  the  Go  stamps  begin  working 
the  reserve  would  .-tand  at  .^32.000  tons,  eipiivalent  to  .V5 
\-,-ire.        n.'ii'intinii'iir    u'oidd    ac.iin    lie    nnslied — lirovidcd 


Oh'l:-l<ISI  h'lTS 


2».! 


al\\ass  that  tlu'  omditinii.  |Rriiiilt((l  -t"  ^\.k\\  an  extent 
tliat  ll'e  .f^rr\e  of  _^._s  ..ears  w.iiild  In  maintained  fiir  Go 
stamj)*  and  cxiess  tonnage  gained  t"  ^^ive  si\  years'  rc- 
serv  fnr  an  additional  to  stamps,  when  tlie  '  itter  unit 
ennid  lie  a<lded,  lirii'^ir.j,  tlie  mill  capaeit)  .ip  to  yn  stamps 
and  the  ore-reserve  to  ,v^  years'  work  for  the  whole  mill. 
The  same  process  'vould  ajjain  he  follnued  thron^h.  and 
the  net  result  would  be  a  f,'radua'  f^ain  in  milling  pov.cr, 
and  with  each  ur.it  of  adtiition  of  plant,  an  advance  in  the 
ratio  of  reserves.  When  five  years'  reserve  has  been  huiit 
up  on  the  lines  above  indicated,  by  which  time  the  mill 
will  contain  150  stamps,  the  question  of  increasinjj  the 
units  of  addition  from  10,  the  standard  up  to  this  point. 
to  15  or  20  stamps  can  be  safely  considered,  and  thus 
throup;hout  the  mine  will  maintain  a  legitimate  and  per- 
fecuy  sound  ratio  between  ore-reserves  and  equipment, 
and  will  fulfdl  the  essential  requirement  of  winning  the 
ultimate  profit  from  the  mine  in  the  shortest  time  con 
sistent  with  sound  ^nd  prud.    t  management. 

It  will  doubtless  be  said  that  the  scheme  I  have  out- 
lined— indeed  this  whole  question — is  too  elaborate  for 
consideration  in  connection  with  the  ordinary  minint^ 
■prospect,'  because  mines  are  frequently  opened  a  ■  1 
worked  by  people  with  limited  means  at  thc'r  command, 
to  whom  it  is  vital  that  the  producing  stage  should  be 
re-.^Iied  at  the  earliest  possible  moment,  without  regard 
to  the  qnesti>'ii  of  ore-reserves.  ( )ne  lias  to  admit  that 
the  industry  of  mining  can  be  conducted  o;i  widely  vary- 
ing principles,  and  expediency  will  often  ride  rough-shod 
over  svstems :  bm  mining  business  which  is  conduct  'd 
upon  the  method  of  expedients,  although  perhaps  it  is  a 
necessary  stage  of  such  a  business,  cannot  be  regarded 
as  either  safe  or  substatuial.  and  if  tb.e  principles  which 
th''s  article  is  intended  to  elucidate  do  not  apply  in  any 
given  case,  then  T  think  so  much  the  worse  for  that  case 

Tn1,atinpsl-.,,r,-T    Tune  fs    Tnni  ^-   A.   DeNNY 


U 


IH 


'1 


-ii 


EQUIPMENT  AND  ORE-RESERVES.— IV. 

(Eduorial,   Ju)y   Ji,    i9"4) 

The  discussion  upon  this  important  subject  has  been 
r>.vived  by  the  vahiable  contribution  from  Mr.  G.  A. 
Denny,  which  we  pubhshed  last  week.  (Jur  readers  will 
join  with  us  in  appreciation  of  so  earnest  and  thorough  a 
presentation  of  his  views.  Such  discussion  fulfills  one 
of  the  highest  purposes  of  technical  journalism. 

Many  aspects  of  the  inquiry  were  touched  upon  in  the 
letter  referred  to.     One  of  them  calls  for  present  notice. 
Mr.  Denny  demurs  to  Mr.  Hoover's  suggestion  that  the 
bank*       'f  the  Hand  is  so  uniform  in  [jcrsisten       and  in 
the  gi    ^.;  of  ore  that  mining  finance  in  South  .ifrica  is 
shorn  of  ail  the  br:  'Hng  dangers  ar-sing  from  the  vaga- 
ries of  ore  deposit!.  II  elsewhere.     Both  of  these  experi- 
enced engineers  are  right,  relatively ;  for  it  is  altogether  a 
matter  of  comparison.     The  reefs  of  the  Rand,  in  their 
uniform  tcncir  and  continuity,  do  somewhat  resemble  coal 
seams — more    than    they    do    'gash-veins,'    for    example, 
lenses  in  schist,  or  "pockets'  in  liinestonc.     As  compared 
with  these  tyjies  of  uncertainty  in  ore  occurrence,  they  arc 
strikingly  regular  and  calculable;  and  yet  when  judged 
by  such  a  standard  of  uniformity  as  a  coal  seam,  the  gold- 
bearing   lodes   of   the   Rand    vary    within   margins    wide 
enough  sometimes  to  try  the  nerves  of  cautious  financiers. 
Recent  events  have  emphasized  this.     The  sliares  of  the 
Bonanza  company  fell  from  £6]  to  £2,  because  ih     ,rade  of 
the  ore  (opened  up  declined  so  much  that  the  '-s.     lated  life 
of  the  mine  was  reduced  from  over  four  years  lO  about  20 
months.      This    is   one   of   the    shares    which    have   been 
authoritatively  considered  as  certainties,  outside  the  limits 
of  ordinary  speculation.     On  the  other  hand,  the  life  of 
Crown  Reef  has  been  extcmled  iti  estimates  from  seven 
years'    supply    of    ore    for     120    stamp-,    to     14    years' 
supply  for  240  stamjis,  simply  because  previous  calcula- 


EQCIPMBXT  AXU  ORB-RESERVES 


1245 


tioiis  had  onlv  included  the  maicrial  U>  he  ublf'-icd  from 
the  South  Reef  and  the  Main  Reef  Leader,  while  later 
developments  have  demonstrated   that   the    wider   Main 
Reef  itself  can  he  reckoned  upon  for  an  exceedingly  big 
tonnage  of  payable  ore.     1-acts  such  as  these  indicate  that 
plans  for  c(iuipnient  are  likely  to  be  disturbed  by  the  un- 
foreseen even  at  Johannesburg.     Indeed,  we  doubt  very 
much  if  gold  mining  would  have  half  the  zest  to  the  m- 
vestor  if  the  element  of  speculation  were  entirely  elimi- 
nated, and  it  is  well  at  all  times  to  emphasize  the  essential 
distinction  between  even  the  best  mining  venture  and  the 
securities,  such  as  t^rst-class  Ijonds,  the  safety  of  which  is, 
humanly    speaking,    guaranteed.      L5onds    give    absolute 
safety  and  a  very  low  rate  of  interest ;  mines  yield  a  high 
return  with  an  inevitable  risk ;  in  some  cases  the  risk  is 
small  and  the  return  is  large ;  in  others,  otherwise.     Both 
arc  equally  legitimate  as  investments.      As   mining  be- 
comes freed  from  foolishness  and  develops  on  a  sound 
basis,  mining  shares  tend  increasingly  to  attract  shrewd 
men  because   the  proportion  of   risk  to   return  becomes 
lessened,  while  in  the  case  of  bonds,  that  relation  becomes 
less  attractive  because  the  safety  remains  no  greater,  and 
no  less,  while  the  plethora  of  trust  funds  slowly  brings 
about  a  fall  in  the  rate  of  interest  receivable. 


EQUIPMENT  AND  ORE-RESERVES.— V. 

(E(liti>rial,    August    4,     1904.) 

Ill  a  recent  (liscussii^ni  of  this  subject,  reference  was 
made  to  the  (liniiiuuion  in  "orkinj;  costs  as  a  mining 
region  grows  older.  Aii_\cne  inaugurating  a  mining  enter- 
prise may  well  afford  to  consider  this  factor,  before  plan- 
ning for  a  lessening  of  expenses  on  the  basis  of  a  large 
and  costly  equipment.  It  is  not  always  realized  how  great 
is  the  drop  in  costs  which  follows  upon  the  improved 
conditions  conse([uent  upon  the  growth  of  a  goldfield. 
In  1894  the  average  cost  of  realizing  upon  the  gold  per 
ton  of  ore  shipped  from  Crifijile  Creek  must  have  been 
fully  $40.  At  that  time  the  smelters  charged  Si 5  per  ton 
for  treatment,  the  railway  took  $5  per  ton,  and  these  de- 
ductions, with  the  higher  cost  of  supplies  and  machinery. 
made  a  fearful  inroad  into  profits.  Only  high-grade  ore 
could  be  handled,  .sorting  was  necessary,  anfl  this  multi- 
plied the  original  expense  of  mining.  Within  five  years 
the  smelter  rate  went  down  to  $6.50  and  the  railwa}' 
charge  to  ?3  ;  and  in  later  years  the  erection  of  large,  cen- 
trri'ly  situated  chlorination  and  cyanide  mills,  competing 
in  the  ore  market  with  the  smelters,  brought  the  total 
charge  for  both  transjxjrt  and  treatment  to  a  mininnmi, 
on  low-grade  ores,  of  $5  jut  ton. 

In  \\'estern  Australia,  in  1897,  the  costs  in  the  outlying 
goldfic'ds  averaged  mere  than  the  value  of  an  ounce  of 
gok'.  The  scarcity  of  water,  the  dearth  of  timber  and  its 
transport  from  elsewhere  by  camels,  the  distance  from 
<listributing  centers  and  the  want  of  experience  in  the 
metallurgical  treatment  of  the  ores — all  these  factors 
united  in  rendering  expenses  so  high  as  to  kill  the  mining 
of  medium-grade  ort  >;.  Within  ;i  eoii])le  of  vc.-irs  the  ex- 
tension of  the  r.iilways,  arrangements  for  securing  water 
from  idle  iiiiiKs  and  the  skill  put  into  the  milling  metli- 


EQUIPMBXT  .IXD  ORE-RESERVES       -'47 

ods,  reduced  c()>ts  by  30  to  50  per  cent.     Tliis  was  done 
without  ar.v  increase  of  equipment. 

The  minimum  figures  of  recent  years  are,  of  course, 
the  result,  ir  large  part,  of  better  equipment  and  a  larger 
scale  of  operations:  but,  quite  Pside  from  this  factor,  tlie 
general  conditions  existing  during  the  earlier  years  of 
mining  in  Western  Australia  anc'   in  the  Cripple  Creek 
region  changed  for  the  better  so  :  uch,  that,  on  the  same 
tonnage  and  the  same  equipment  at  the  same  mine,  the 
expenses  went  down  within  five  years  to  the  extent  of 
fullv  50  per  cent.     That  is,  to  put  it  plainly,  at  Cripple 
Creek  costs  averaged  $40  in  1894  and  $23  in  1899:  in  the 
outlving   districts  of   Western   Australia   they    averaged 
$22  in  1897  and  $10  in  1902.    Tt  is  obvious  that  the  incre- 
ment of  profit  to  be  gained  from  a  larger  output  would 
have  been  exceeded  during  this  period  by  the  economies 
due   to  the   rapid   improvement   in    local   conditions,   and 
that  a  management  which  deferred  the  enlargement  of  its 
equipment  would  have  won  a  larger  final  profit  than  one 
which  wasted  its  ore-reserves  in  meeting  the  heavy  ex- 
penses inci-dental  to  the  youth  of  a  mining  district. 

The  subject  is  one  to  which  we  will  return.  It  is  well 
to  udd  that  the  high  costs  at  Cripple  Creek  were  due  to 
the  fact  that  of  the  ore  mined  not  more  than  one-third 
underwent  shipment;  even  in  rich  mii;es  one.-half  was 
.sorted  out,  in  others  as  much  as  three-quarters  or  even 
more.  Thus  the  cost  was  high  per  ton  of  ore  rcali/ed 
This  was  due  to  the  nature  of  the  ore  occurrence. 
Costs  are  now  about  $14  pcr  ton  as  compared  to  %2},  in 
1899,  not  so  much  because  general  conditions  have  gone 
on  improving,  but  by  reason  of  tlie  larger  capacity  of  the 
custom  mills  and  the  bigger  proportion  of  those  low-grade 
ores  on  which  treatment  charge;  are  relatively  low.  In 
Western  .Xustralia.  similarly,  since  M)nj  the  beneficent 
rcstilts  of  the  CcKilgarlie  water  scheiTie.  the  extension  of 
the  railways,  the  improvements  in  ore  reduction  and  the 


IP! 


I 


248 


77//:  /:(-(),V0.1//C".V  or  MIXIXG 


sinsc  of  stability  ilue  to  tlu'  (ipciiiiii;  up  of  lar,L;o  n.>LTVL's 
of  ore  have  warranted  estimates  of  an  increment  of  profit 
due  to  larger  eiiuipmenl,  and  t(ulay  even  an  outlvinj^ 
mine  like  the  L'ljsmiipuliian  exhibits  workin;^  co>ts  as 
low  as  $544  per  ton,  inclusive  of  development  and  taxes. 
Considerations  such  as  these  prove  that  the  solution  of 
the  problem — the  ratio  of  e(|iiipment  to  ore-reserves — 
must  be  determined  by  the  local  conditions  of  each  case, 
and  not  upon  general  theory,  however  w- 11  founded.  But 
a  workinc:  theory  is  quite  necessary,  in  order  to  start  with 
intelligent  ideas  upon  the  subject. 


ORE-RESERVES  IN  GOLD  MINES 

Tlic  Editor: 

Sir— 1  liavc  ju>t  ticcn  ru-rcadmLC  Mr.  Hoover's  articles 
of  March  24  aiul  May  Kj,  and,  if  nut  luo  late  in  the  ticld, 
I  will  make  a  lew  remarks  on  some  ]>(uiits  raised  liy  him. 
Mr.  Hoover  says  that  "the  maximum  profit  from  any 
(gold)  mine  can  only  be  obtained  by  the  most  rapid  ex- 
haustion of  the  mine,  and  that  most  rapid  exhaustion  is 
to  be  secured  only  by  the  most  vigorous  prosecution  of 
development  and  'he  maximum  equipment  that  can  be 
employed."  He  then  goes  on  to  show — as  a  result  of 
carrying  out  this  system — that  an  economic  limit  to  a 
mine's  ore  reserves  intrudes  itself  as  a  factor,  and  that 
this  economic  limit  works  out  at  abiuit  three  years.  From 
the  technical  point  of  view  I  feel  sure  that  Air.  Hoover's 
arguments  are  correct.  They  are  unanswerable,  and  can- 
not but  be  endorsed  by  technical  men. 

Now  let  us  look  at  ore  reserves  from  the  point  of  view 
of  those  who  buy  the  shares.  What  do  they  say?  It  is 
a  true  saying  that  "those  who  pay  the  piper  call  the  tune,' 
and  as  the  investors  in  gold  mines  furnish  the  capital 
wherewith  the  industry  is  kept  going,  it  is  only  right  that 
their  side  of  the  argument  should  carry  weight.  I  will 
.issume  that  these  people  know  as  much  about  sound 
finance  as  Mr.  Hoover  does  about  economic  mining — in- 
deed, you  will  find  H.  C.  Hoover,  Esq.,  the  capitalist, 
among  their  number. 

The  argument  of  one  01  this  investors'  class  would  be 
as  follows:  "I  have  money  to  invest  and  intend  to  put  it 
in  gold  mines.  I  have  a  sound  knowledge  of  finance, 
and  believe  that,  besides  the  value  of  any  capital  in  the 
mining  industry,  my  personality  will  have  a  sound  and 
steadying  influence  on  a  class  of  securities  hitherto  held  by 
many  people  in  disrepute.  But  if  I  come  in,  and  find 
money,    I   brin^'   in    with   me   my   knowledge   of   sound 


^1 


1 1 


TIIR  liCOXOMICS  OF  MIXIXG 


finance,  and  I  insist  that  the  investments  placed  before 
nie  shall  conform  tu  a  certain  degree  of  safety,  which  de- 
force I,  not  you,  .shall  decide.  1  see  that  from  the  technical 
point  of  view  Mr.  Hoover's  claim  for  an  ore-reserve  of 
only  three  \ears  is  sound;  but  I,  who  am  asked  as  a  con- 
se(|uence  to  risk  the  sjjreater  ])art  of  my  capital  on  the 
chance  of  tindin<,^  ore  that  is  not  yet  exposed,  and  know- 
ing the  risks  of  mining,  decline  to  go  in  on  such  terms. 
.\s  a  sound  financier  I  wish  to  insure  my  capital,  and  I 
can  do  so  to  a  great  extent  by  insisting  that  there  shall 
he  ore-reserves  for  considerably  more  than  three  years 
ahead.  I  know  that  this  is  not  the  most  economical  way 
of  handling  the  mine,  and  that  there  is  a  loss  of  interest 
1)11  the  mt)ney  locked  up  in  these  extra  reserves;  but  I 
look  on  this  loss  as  the  price  I  pay  for  insuring  my  capi- 
tal, and  am  satisfied  to  incur  it.  If  my  terms  don't  suit 
you,  I  will  withdraw  from  gold  mining,  and  the  gamblers 
and  charlatans  who  have  in  the  past  made  this  industry 
their  hunting  groiu.d  can  return." 

Under  itieal  conditions  of  investment  a  three  years' 
ore-reserve,  as  recjuired  by  Mr.  Hoover,  would  really  be 
enough,  for  the  shares  would  be  capitalized  only  at  such 
a  price  as  to  }  ield  30  per  cent  to  the  investor,  who  would 
tiien,  on  his  three  _\ears"  reserves,  have  the  respectable 
proportion  of  yo  per  cent  of  the  mine's  market  capitaliza- 
tions in  sight  as  net  profit.  I>ut  in  a  mine  that  is  located 
in  a  gond  district,  with  big  orebodies,  and  looking  well 
in  the  Iwttorn,  such  a  yield  as  30  ])er  cent  is  now  impossi- 
ble to  secure.  If  such  a  min'e  can  be  bought  into,  to  yield 
15  per  cent,  it  is  as  much  as  the  investor  can  look  for; 
but  more  often  the  yield  of  interest  on  the  price  of  stand- 
ard gold  mines  is  found  to  be  no  more  than  12,  10  or 
even  as  l<nv  as  8  per  cent.  Personally,  I  have  come  to  the 
conclusion  that  the  best  gold  mine  should  return  15  per 
cent  to  an  investor,  of  which  he  nnist  set  aside  at  least 
half  for  the  redemption  of  his  cajiilal ;  if  the  mine  is  not 


ORE-RliSnRIT.S  I\  i'.OI.n  MIXES 


2.-1 


li^'kinp  well  in  depth  tlu'    ate  of  interest  reeeived  ought 
to  he  consideraljly  more. 

Mr.  IlooverV  second  article  discusses  <Te-reserves  in 
tiieir  relation  to  mine  valuation,  lie  sa\s,  with  truth, 
that  it  is  rarely  possihle  in  the  initial  stai^e  lo  tin  1  a  mine 
with  a  net  jirotit  in  sii,du  equal  to  the  ])rice  asked  for  it. 
I  had  said  that  it  is  rarely  possible  to  l.uy  .shares  on  this 
basis  in  a  producing  mine,  and  we  had  both  tried  to  an- 
swer the  question,  W  hat  marf^in  of  risk  is  i'  permissible 
to  take?  Mr.  Hoover  arjjjues  that  this  margin  of  risk 
ought  to  be  determined  differently  for  individual  mines, 
and  gives  most  ingenious  theories  for  arriving  at  this 
unknown  factor — theories  based  on  locality;  geologic 
structures;  the  nature  of  ore-shoots;  width,  length  and 
value  of  the  orebodies — all  of  which  must  be  assessed 
at  theii  just  value  and  adtled  to  the  net  profit  then  in 
sight.  I  had  previously  (in  estimating  the  cliances  of  the 
average  sound  gold  mine,  over  and  above  its  present  net 
profit  in  sight )   lumped  all  these  iK)ssibiIitie.--  together  as 

job  lot.  My  formula  is  that  a  share  is  worth  buying  if 
the  net  profit  in  the  mine — assuming  developments  in  the 
bottom  are  normal  as  to  width  and  '-alue — is  cfjual  to  two- 
thirds  of  the  market  price  of  the  mine.  That  means  that 
I  expect  enough  additional  ore  will  be  exposed  in  depth  to 
at  least  return  the  one-third  of  the  capital  which  is  un- 
guarded, and  also  pay  a  good  interest  on  the  whole  of  the 
capital  at  stake.  This  generalization  of  mines  strikes  Mr. 
H(K)ver  as  somewhat  crude.  But  let  me  point  out  that  it 
was  written  for  laymen.  The  average  investor,  so  far  as 
I  can  sec,  has  no  standard  to  guide  him.  and  is  liable  to 
flounder  most  hopelessly  when  he  buys  mining  shares. 
The  mere  putting  into  operation  of  this  bit  of  advice,  and 
therebv  rc<lucing  mine  capitalizations  to  on>third  more 
than  the  net  value  of  the  current  ore-rcser\-cs,  would  alter 
the  status  of  mining  investments  out  of  all  recognition.  In 
other    words,    to    produce    a    paradox    on    one    of    Mr. 


252 


Tlir.  ECOXOMICS  01-  MIMXG 


Hoovvr's  favDriie  cxprcssicjiis — amortizati' .ii  would  set  in, 
and  tin-  invcstini,'  body,  instead  of  dying,  would  be  on  the 
higli  road  to  recovery 


London,  July  20,  i<X)4. 


J.   H.  CURLE. 


THE    PERSONAL    EQUATION 

(tdlturial,    August    18,     1904.) 

The  repeated  insisieiiee  in  tliese  columns  of  the  impor- 
tance to  the  mining  imUustry  of  the  sense  of  professional 
responsibility  amonp  the  chiefs  who  direct  the  ojx^rations 
of  mines,  mills  nnd  smelters,  will  have  failed  utterly  if  it 
has  not  brought  out  the  grt  t  underlying  fact  that  per- 
sonal character  is  the  pilot  \  ho  steers  an  undeviating 
course  amid  the  shoals  of  pliant  circumstance.  Character 
means  that  a  man  will  do  the  same  thing  even  under  dif- 
fering conditions  ;  he  is  wanting  in  individuality  who  m<id- 
ifies  his  action  according  lo  temix-r  and  environtr.ent.  It 
is  the  one  element  which  gives  each  man  an  identity 
among  his  fellow  s.  Kach  is  a  law  unto  himself  if  he  pos- 
sesses character;  but  a  concrete  mob,  if  he  does  not. 

Given  the  same  data,  the  conclusions  formed  oy  diller- 
tnt  engineers  will  vary,  by  reason  of  the  introduction  of 
that  decisive  element  which  represents  the  personality  of 
the  man  who  weighs  them,  balances  them,  and  decides 
their  relative  bearing  upon  the  work  in  hand.  The  per- 
sonal equation  is  the  application  of  character  to  practice. 
While  the  ecjuation  includes  an  unknown  term,  that  term 
is  supposed  to  have  a  fixed  value ;  otherwise  it  makes  a 
sum  too  difficult  for  the  business  of  life,  which  has  no  time 
for  complexities.  The  expression  of  the  personal  equa- 
tion is  judgment,  that  indefinable  quality  of  mind  which 
enables  a  man  to  focus  the  experience  of  a  lifetime  upon 
the  work  in  hand  and  gives  advice  which,  in  all  human 
probability,  represents  the  best  solution  of  the  problem 
set  before  him.  In  this  efTorv,  training  is  a  factor,  in  se- 
lecting the  experience  which  throws  the  best  light  on  each 
separate  case,  and  in  establishing  the  logical  bearing  of 
various  kinds  of  knowledge  upon  the  special  circum- 
stances to  be  studied. 

When  two  or  more  individuals  co-operate,  various  per- 


254 


Tin:  licuKOMics  or  mixi.w. 


^onal  i([uations  of  unlike  icriii^  ar^  cnml  i.  il  and  tlie 
result  can  no  lont^ir  he  txi  n -^m  ij  l.hiiitily  Character 
is  <>l)l:tt'raf' <1 :  a  cr.  -tai.nu-  ,ni!i\  idiial  brcniiU'  an  anior- 
pliuus  aggregate.     \ou  cannot  sji.dicate  character. 


ORE-RESERVES 


^AuKUil    I 


;04.) 


Tin-  lid  it  or: 

SiK — 1  may  be  pardomd  lor  rtturning  to  the  char^u , 
as  tlic  iiiaiur  has  privcd  uf  soiiii.'  ii.tcrtst. 

In  the  JuUKNAL  oi  April  21,   Mr.   Lawrence  seems  t  ' 
object  to  the  use  of  the  word    amortization,'  and  before 
his  onslauf,dit  1  hasten  to  enireiicli  myself  behind  prece 
dent.     My  assistant,  at  my  rceiiiest,  has  scanned  the  pages 
of  two  well-known  standard  works  on  mining,  and  finds 
that  the  word    amorti/ation'  appears  in  those  pages  im 
less  than  162  times.   As  to  the  exact  Mieaniiig  of  the  word, 
•Investor,'  in  your  issue  of  June  2'.  has  truly  exi)lainiil 
the  origin  ■  f  the  word  and  its  most  proper  Use.     I  do  not 
wish,  iKHvever,  to  be  taken  as  claiming  amortization  as  a 
common    feature    "i   mining    finance.      Amortization,    a.^ 
used  here,  is  a  factor  necessarv  to  consider  in  tinancia! 
calculations,  yet  it  is  a  thing  not  often  actually  set  out  i>f 
dividends.     In  other  words,  the  recovery  of  capital  from 
a  wasting  enterprise  within  a  given  period  is  a  necessary 
factor  in  the  calculation  of  \hc  pros  and  cons  of  that  en- 
terprise.    Having  served  for  tiie  purpo-t.   of  calculation, 
it  is  quite  inimater' il  whether  the  $j  received  from  this 
enterprise  should  be  separated   and  each   stamped   indi- 
vidnallv — one  as  amortization  and  the  other  as  dividend 
— (^r  not. 

In  the  JofRN.\L  of  March  31,  Mr.  Spilsbury  says:  "In 
the  first  place,  from  my  own  experience,  I  can  safely  say 
that  the  ore-treatment  plant,  whether  milling,  concentrat- 
ing, smelting,  or  other  reduction  means,  of  over  75  per 
cent  of  the  mines  I  have  know.i.  is  from  initial  erection 
well  in  excess  of  the  output  of  the  mine  under  all  ordinary 
conditions-  of  development."  I  sympathize  most  deeply 
with  Mr.  Spilsbury  that  in  75  per  cent  of  his  experience 

Sice  article  'Aniorti^ntion.'  by  F.  Ilohart.  p    J_'I. 


::.,() 


Till-.  liCOXOMICS  OV  MIXIXC 


I 


ai\(l  practice  his  l^t  lias  bi-i'ii  ca-t  aiiK'tii:  niiMiiai.aKfd 
mines.  I  carefully  excluded  tliis  class  in  fcnuidinK'  my  ar- 
munent,  an.l  1  cannot  accept  llie  aliove  -tatcnuiit  a.,  any 
iifutation  of  my  ^i-ncralizatidii.  Mr.  Siidsliury  j^ivcs  an 
example  "f  a  mine  whicli.  I  d-erve,  has  the  fnllouinK' 
characteristics : 

1.  I'nder  ordinary  conditions  of  devel  i)ment,  it  re- 
turns a   fair  profit  and  an  ■■amortization    fund  oi   5  jier 

cent." 

2.  With  mine  development  of  a  viyor  which  I  propose, 
I  ohserve  that  the  hauling'  engine  will  not  handle  the 
waste  dirt,  and  that  the  profit-  will  all  be  eaten  up  hy 
doint:;  this  increased  development. 

3.  I  ohserve  that.  t;iven  thi.-  development  done,  the 
mine  is  not  likely,  with  its  jirimary  plant,  to  earn  enonj^h 
protii  to  build  the  secondary  plant. 

4.  Supposing  tl'.at  tiie  seccjiidary  plant  be  built,  the 
profit  derived  from  the  combined  plants  will  possibly  be 
less  than  it  would  from  the  primary  plain. 

The  case  seems  to  me  al)snlutely  hopeless.  I  must  again 
extend  my  sympathy  to  Mr.  Spilsbury  in  having  a  mine 
of  sucli  truly  w.  etched  character,  in  that  the  margin  of 
profit  is  too  narrow  to  stand  such  a  campaign,  and  that 
dispersion  of  the  orebodies  seems  so  great,  and  tiie  waste 
dirt  is  of  such  enormous  proportions,  that  neither  the 
excavations  for  ore  give  room  enoiigh  to  stow  it  away, 
nor  is  the  hauling  engine  good  enougli  to  cojx'  with  it. 
It  is  a  most  trying  case,  and  I  feel  like  admitting  at  once 
that  this  instance  is  like  those  emanations  of  the  human 
brain  called  nightmares,  entirely  out  of  the  reach  of  sound 
kigic.  My  heart  especially  gix-s  out  to  Mr.  Spilsbury 
when  I  notice  that  in  this  particular  instance  an  amortiza- 
tion fund  of  5  per  cent  is  considered  sufficient,  and  there- 
fore that  the  life  of  tins  wretched  mine  is  bound  to  be  at 
least  16  years.  If  Mr.  Spilsbury,  however,  will  give  us 
the  figures  as  to  the  size  of  the  orebodies,  the  distance 


ORi:-Riis!:h'ri:s 


257 


between  them,  the  ijnifit  jht  tmi.  the  totn.l  workinp  cnsts 
and  the  fixed  l•har^,'e^,  I  will  .'ii^ree  to  try  to  mn'-e  my  plan 
fit  or  show  that  hopes  of  nniortiz-.-ion  before  death  should 
he  abandoned. 

for  Mr.  Itipalls'  letter  in  the  Joirn-.m.  of  May  5,  and 
Mr.  I'.rown's  letter  of  May  26,  I  have  to  than':  l)Oth  Mr. 
int,'alls  and  Mr.  ilniwii  for  the  kindly  trouMv  they  have 
taken  to  nnderstand  tli''  poinis  whiih  I  desired  to  make 
clear  and  the  support  they  havi  i,'ivt'n  I  how  to  Mr. 
Infjalls'  suggestion  that  in  Muh  nutal  mines  as  have 
a  product  of  variable  price  tlu'  iiu^'stion  may,  ui  certain 
conditions,  be  very  much  modi'iid.  Mr.  liruwn  has  pre- 
pared a  useful  tal>!e.  which  I  trust  Mr.  Spilsbury  will 
avail  himself  of.  -s  it  very  much  simplifies  the  application 
of  the  mati^r  and  might  assist  him  in  his  troublous 
practice. 

As  to  Mr.  Brown's  .iiiggestion  cf  the  temptation  of 
superintendents  to  treat  rock  rendered  profitable  by  the 
lowermg  of  costs,  due  to  increased  equipment,  and  thus 
lowering  the  avcidge  profit  of  the  mine,  so  as  to  even 
lower  the  total  profit  and  to  upset  the  calculations  on 
which  the  extend'^  1  plant  was  authorized,  I  believe  Mr. 
Brown  should  carry  his  argument  somewhat  further — 
althoup;h,  aside  fror,.  the  immediate  question,  1  might 
observe  that  superintendents  should  no^  yield  to  the 
temptation  to  do  wrong.  If  there  exists  in  a  mine  such  an 
amount  of  ore  of  a  lower  grade  which  can  be  profitably 
worked  by  a  reduction  of  costs,  to  be  secured  by  larger 
equipment,  as  will  affect  the  total  output,  then  this  ore 
forms  a  problem  by  itself,  entirely  aside  from  the  ore 
which  was  within  the  scope  of  the  pr-mary  plant.  Either 
this  secondary  ore  warrants  an  increase  in  equipment  to 
work  it,  upon  its  merits  alone,  or  it  does  not.  If  it  does 
so  warrant,  and  the  primary  ore  also  warrants  an  exien- 
sion  of  plant  for  reasons  set  out  in  my  programme,  then 
there  should  be  two  extci.sions  of  the  plant  and  not  one. 


258 


TUB  ECOXOMICS  OF  MIXING 


In  your  issue  nf  April  21,  yuu,  in  effect,  say  tliat  tlic 
unashamed  and  essential  American  idea  is  that  it  is  pcKir 
business  to  mine  for  jxisterity,  and  I  assume  from  the 
context  that  \ou  otYer  this  as  a  criticism  on  my  plan.  'Ihe 
proposal  1  have  laid  down  will,  if  followed,  exhaust  a 
mine  far  more  ([uickly  than  is  common  in  American  prac- 
tice. It  is  my  helief  that  it  is  possible  to  extend  the  de- 
velopment in  the  average  mine  by  the  depth  to  which  the 
shaft  can  be  sunk,  say  350  to  450  ft.  per  annum,  and  if 
my  plan  were  followed,  mines  would  be  exhausted  with 
this  rapidity.  Instead  of  most  of  the  American  mines 
being  more  than  10  years  old  and  few  of  them  excavated 
to  a  depth  of  1.500  ft.,  they  would,  had  my  plan 
been  followed,  been  excavated  J  a  depth  of  over  3,000 
ft.;  in  fact,  amon<;  the  most  serious  objections  which  I 
see  to  the  proposal  which  I  have  made,  is  r'-t  that  it  works 
the  mines  too  slowly,  but  that  it  works  them  too  fast.  It 
has  been  suggested  to  me  that  from  the  broad  standpoint 
of  public  good  it  will  exhaust  the  mines  too  rapidly.  As 
Mr.  Ingalls  points  out  in — say,  copper  mines — this  pro- 
gramme would  Hood  the  market  with  metal. 

In  your  issue  of  April  ji  you  raise  the  question  of  the 
occasional  desire  on  the  part  of  a  mine-owner  to  devote 
himself  to  development  work  with  a  view  to  increasing 
his  ore-reserves  and  profit  in  sight  to  a  figure  desirable 
from  the  standpoint  of  .sale  of  the  mine.  This,  of  course, 
is  a  matter  of  policy  entirely  outside  the  discussion  of  a 
method  to  get  the  great.  ^  ultimate  profit  on  the  ore  itself 
—this  involves  the  gre:.t  science  of  getting  the  most 
money  out  of  some  other  human  being. 

In  your  issue  of  June  23,  Mr.  Bancroft  raises  an  im- 
porta.  t  subject  in  a  discussion  of  the  care  and  nurture  of 
infant  mines.  I  wholly  agree  that  tlie  problems  which 
surround  the  installation  of  the  primary  plant  may  often 
be  far  different  from  those  of  the  secondary  plant.  Mr. 
Bancroft's  article   I  must  jwint  out  to  one  critic  as  my 


ORE-RF.SILRl'RS 


L'no 


justification  for  statint^  the  case  in  the  manner  in  which 
I  did — that  the  real  proMem  of  ratio  hcs  for  its  solution 
in  expansion,  not  in  original  installation. 

If  I  were  poinp  to  generalize  on  the  subject  of  nrhnary 
plants  1  should  probably  fall  back  upon  the  principle  of  a 
friend  whose  occupation  i  the  operation  of  mines  through 
their  nursery  stapes;  tha.  is,  "In  common  business  pru- 
dence do  not  erect  a  treatment  plant  at  all  until  there  is 
enough  profit  in  sight  to  repay  the  cost  of  it." 

H.  C.  Hoover. 
Johannesburg,  July  15,  1904, 


NO-LIABILITY    COMPANIES 

(^eptcInl)e^   8,    1904-) 

The  Editor: 

5iK__ln  your  <liscussion    .n  mining  finance  it  may  n(jt 
be  out  of  place  to  consic'-      :.c  question  of  the  "no-liability' 
company  as  practiced  m  Australia.     This  system  is  not 
well  known  in  the  United  Slates,  and  as  it  is  resorted  to 
so  largely  in  a  country  whose  gold  output  was  last  year 
the    largest    in    the    world,    it    is    certainly    worthy    of 
consiilcration.     The  reason  that  the  •no-hability'  company 
has  such  a  popularity  in  Australia  is  that,  exclusive  of 
Western  Australia,  the  mines  are  opened  and  supported 
almost  entirely  by   local   capital,    the   shares  being  held 
mostly  in  small  blocks.      X-arly  all  miners,  and  a  large 
prnpo'rtion    of   the   outside   public,    speculate    in    minmg 
si  .res.      Local   capitalists,    not    being   strong  enough    to 
underwrite   or   finance   large   undertakings,   and   with   a 
desire  to  retam  the  cotitrol  of  the  mines  in  the  country, 
the  'no-liabilitv'  company  has  sprung  into  existence,  untd 
to-day  it  is  an  inseparable  feature  of  Australian  nimmg 

practice. 

i'revious  to  the  introduction  of  this  class  of  organiza- 
tion the  limited-liability  company  was  the  method  oi  flota- 
tion adopted;  bin  including,  as  it  did,  among  its  share- 
holders a  great  number  of  miners  and  others  with  limited 
means,  whcT)  a  large  'call'  was  made  at  one  time,  the 
poorer' shareholders  would  olten  be  unable  to  meet  it,  and 
cases  have  occurred  where  individuals  have  been  thrown 
into  bankruptcy  on  account  of  their  share  liability.  In 
contrast  to  this,  in  a  liability  company,  a  person  buying 
shares  tm  wl.ich  only  a  frac-:  .n  of  the  nominal  value  has 
beer  called  up,  assuiner  '  ^ability  to  meet  any  future 
calls.     He  can  drop  ou-  lin'c  he  sees  ht,  and  in  the 

rase  of  non-payment,  usually  after  the  lapse  of  one  month. 
the  shares  are  sold  at  auction  on  the  Stock  b.xchani;e, 
after  notice  of  the  sale  has  been  duly  advertised  in  the 


XO-Ll.tlill.lTV  COMI'.IMI'S 


liOl 


local  papers.  I'hc  no-liahility  company  has  been  the 
means  of  iiroducinp;  a  lar^e  ani'  mi:  of  i,'ol(l,  hut  it  has 
many  weak  points,  amontx  the  cliief  of  whicli  is  the  fact 
that  it  increases  the  speculative  element  in  mining  invest- 
ment, and  it  is  the  earnest  desire  of  every  cnf,nncer  to  re- 
duce the  speculative  element  in  mining  as  much  as 
possible. 

One  writer  would  have  So  per  cent  of  the  share  value 
of  a  mine  in  siLdit  as  profit  before  considering  it  a  good 
investment,  and  though  that  is  a  consummation  devoutly 
to  be  wished,  vet  from  the  engineer  s  viewpc-iint  it  is  luam- 
•estlv  asking  too  much.  This  method  would  re(iuire  only 
a  sampler  and  an  assayer  to  determine  the  value  of  a 
mine,  but  every  day  the  examining  engineer  is  called  upon 
to  pass  judgment  on  propositions  that  could  not  comply 
with  the  80  per  cent  condition. 

Every  proposition  we  investigate  is  not  a  big  one,  and 
to  condemn  wholesale  all  prospects  we  come  across  would 
require  verv  little  of  what  we  may  call  mining  intuition. 
r,y    prospects    as   here    used,    I    include   properties    from 
which  a  considerable  amount  of  ore  may  have  been  taken, 
))ut    which   have   liltie   or  no   ore    in    sight.      This,   then, 
brings   i"    the   legitimate   element   of    speculation,    which 
aspect  tlie  engineer  can  never  separate  from  mining,  and 
with  which  he  must  always  reckon.     In  many  cases  this 
is  (piite  large   enough,   without  endangering  the  success 
of  the  enterprise  by  foriuing  a  noTiability  company,  often 
with  an  entirely  inadeciuate  capital ;  the  amounts  .secured 
by    each    separate    call    being    so    small    that    economical 
methods  cannot  be  adopted,  as  the  funds  do  not  allow  of 
any  scope  in  planning  the  work.     I  do  n(,t  for  a  moment 
mean  to  imply  that  all  no-liability  companies  are  crippled 
through  this  sort  of  policy,  because  such  is  not  the  case; 
but  a  great  deal  of  this  hand-to-mouth  policy  does  ex-st. 

The  philosophy,  then,  of  the  call  system  is  based  on  the 
verv   thing  the  engineer  seeks  to  eliminate,  namelv.   the 


7 '//;"  J:l().\OMICS  op  MIXfXG 


flcnuiii  f  ^ptTii' ttii ill.  \  c<inipaii\  ^  fcinK'd  to  wurk  a 
I)r(i{)ert\.  Let  us  fi'Uow  l!u'  tm '.IkkI  pursued  by  a  siiiall 
une  (if,  say,  iio.ooc  tniiia  apital  and  i\  sliar- s.  ( )nc 
or  tun  sli:!liii,i;>  ma\  be  re((uired  'Aitli  the  >ub-Lriptii)ii. 
and  then  3d.  pir  month  per  sliari  .s  ealleil ;  this  l)rings 
in  £125  per  n  nth.  All  wnrk  will  be  earried  out  in  the 
most  sliji  lod  niannei  to  inak  the  money  iri'  as  lar  as 
possible  at  the  partieu,  ^r  m  lent,  with  the  hi;pe  tiiat  the 
mi'ie  wilt  soon  be  able  to  pay  its  way.  It  is  true,  many 
pc(  iile  have  p;  t  money  into  mines  nn  this  sort  of  a  basis 
who  won'  not  on  anv  other,  miners  inakinL''  £2  per  week 
owninp  and  paving'  ealls  on  small  blm-ks  of  shares.  These 
small  hM!dinij;s,  no  d'>ulil.  atj^reL^ate  eonsiderable  --nms 
and  constitute  an  i.nportant  pereent;n,'e  of  the  total  capi- 
tal nivested  in  mitu-  in  this  part  of  the  world,  and,  too, 
tliey  materially  supi)ort  the  industry  ;  \  et  \\  ith  a  proper 
workini:;  capital  in  the  beL^inninu,^  at  t!u  disposal  of  a  con".- 
petcnt  man,  a  .threat  deal  more  could  be  done  with  the 
same  cash,  and  therefore  with  the  greater  chance  of 
success. 

Another  great  objection  to  the  ncKliability  companv  is 
the  ease  with  which  it  lends  itself  to  the  ends  01  the  dis- 
honest company  pr;.  ii>ter.  In  the  limitid-liability  com- 
pany the  larger  sums  ri  quired  are  a])t  to  cause  a  closer 
invest 'Ration  into  the  merits  nf  a  property  ,  whereas  in  the 
nodiability  conipany,  as  the  payments  arc  intermittent, 
smaller  ami  not  a>  much  felt  by  the  investor,  he  is  willing 
to  take  a  bigger  risk,  because,  lu-  argues,  he  can  drop  out  at 
any  time,  and  he  often  goe^  mto  a  company  much  as  he 
would  put  u|)  money  on  a  hor.^e  race.  ( )nce  in,  glowing 
rejxirts  frfim  the  mine  keep  him  [laxing  calls,  until  often 
he  has  a  consiilerable  sum  invested,  and  then  continues, 
because  he  has  alreadv  so  nuuii  at  stake.  Taking  advan- 
tage f>f  this  weaknes.-  of  iuiman  nature,  the  dishonest 
promoter  gets  one  or  more  exceeding!)  favorable  rejx^'rts 
from  a  certain  class  of  mining  quack  and,  w  ith  these  as  a 


NO-LI.  iBILITV  COM  P.  IMES 


203 


l.;isi>;,  be  snlicits  sul)srri])tinns.  Tlu'  owner  is  to  he  paid, 
pi  rliaps,  a  certain  amount  of  cash,  in  cast'  of  flotation  ; 
tile  promoter  reserves  for  himself  a  sufficient  numher  of 
siiares,  issued  as  fully  paid,  and  .he  rest  are  offered  to 
the  puhlic.  Xaturally,  attenii)ts  are  made  to  create  an 
artificial  value  in  the  shares,  by  issuing  ojlowing  reports 
from  the  mine,  and  hy  whatever  other  means  are  at  hand. 
<  )nce  a  demand  for  shares  is  created,  out  j.;oes  the  pro- 
tin  iter,  although,  as  his  shares  are  fully  paid  up.  he  may 
find  it  to  his  advanias:je  to  hold  on  for  a  considerable 
lcnf:fth  of  time  as  the  mrre  moiiey  paid  in  calls,  other 
thinj^s  beini^  equal,  the  more  valuable  his  own  holdings 
become. 

Despite  all  its  handicaps,  the  noliabilily  company  con- 
tinues, and  will  continue,  to  exist  in  Australia,  as  it  af- 
fords the  working  miner  and  small  capitalist  an  oppor- 
tunity of  niaki'ig  a  stake,  and  in  many  other  wnys  suits 
the  conditions  of  the  country.  It  must  be  borne  in  mind 
that,  to  a  very  large  extent,  the  ores  are  free  milling,  and 
can  be  treated  in  comparat:^'ely  inexpensive  plants,  so 
that,  as  soon  as  the  pay-shoot  is  encountered,  the  property 
can  begin  to  pay  its  way  without  the  necessity  of  having 
to  plan  a  special   metallurgical   plant. 

C.  S.  Herzig. 

Melbourne,  July  25,  1904. 


i ' 


ENGINEERS*   ESTIMATES  OF  COSTS 

By    \V.    R.    l.NGALLS. 
(September    ^-;,    1^04.) 

Mr.  Wliinery,  in  an  able  paper  in  a  recent  issue  of 
Tlic  E>igiiiccniig  Nczcs,  discusses  the  prevalent  distrust 
of  ens^incerinj;  estimates ;  he  admits  this  distrust  to  be  nut 
without  excuse,  unless  tlie  estimates  are  reliable.  lie 
therefore  analyses  the  causes  that  seem  to  discredit  tin- 
more  carefully  prepared  e>tiniates.     Into  every  complete 


estimate    <it     the    jjrohaljle   cost 


a    projected    ent;i- 


neerint(  work  the  fnUowinjj  elements  enter:  i,  Quan- 
tity and  character  of  work  to  be  done;  2,  physical  cnndi- 
tioiis  muler  which  it  nui>t  be  performed;  3,  best  metlind 
of  execution  ;  4,  unit  cost  of  the  various  items ;  5,  general 
expense;  6,  market  fluctuations;  7,  ability  and  skill  of 
execution;  8,  integrity  and  honesty  in  execution;  o,  for- 
tuitous incidents;  10,  assumption  that  plan  and  scope  of 
work  will  not  be  altered.  Mr.  W  hinery  considers  that 
only  items  i  to  5  are  properly  within  the  scope  of  the 
engineer,  ai,  1  argues  that  he  is  no  better  able  to  forescf 
the  contingencies  that  may  ari>e  under  items  O  to  10 
than  the  man  of  business,  and  therefore  should  disclaim 
responsibility  for  prophecy  co'icerning  them.  All  of  this 
should  be  distinctly  understood,  however,  and  a  state- 
ment to  accompany  an  estimate,  something  like  the  fol- 
lowing, is  therefore  proposed : 

"The  survevs  and  examinations  for  the  proposed  im- 
provement have  been  made  with  unusual  care  and  thor- 
oughness, and  plans  and  outline  specifications  have  been 
worked  out  and  considered,  with  great  care;  the  quanti- 
ties and  the  character  of  the  work  involved  have  been 
asccrtaine<l  as  fully  as  is  practicable  before  the  w  k  is 
actually  under  construction,  and  we  have  made  iiberal 
allowance,  where  any  uncertainty  exists  in  this  respect. 
In  estimating   the  probable  cost  of  the   work  we  have 


/:.V(;/.\7;7;a'.v  i-sriM.iri-.s  or  costs    lv,:, 


!  Tsi'd  (lur  fij^uri's  up"!!  i'lc  picMMit  m.u'kit  value  nf  ma- 
urials  and  lalmr  iii  tin.'  rcijioii  uIkti'  tin.  unrk  is  t"  he 
(lone.  Tile  unit  prices  applied  t^  the  several  kinds  of 
work  are  based  upon  our  personal  knowled^'C  and  experi- 
ence, supplemented  liv  all  the  information  we  have  been 
able  to  obtain  about  the  cost  of  similar  wi)rk,  the  special 
phvsica!  conditions  that  are  likely  to  be  encountered  in 
this  particular  w  >  rk  bavin-  been  i;iven  full  consideration. 
L'nder  the  In  ad  of  Ljeneral  expenses  we  have  added  such 
sums  for  e!i,£,dneeriiiir  superintendence,  clerical  work,  and 
interest  and  depreciation  upoi.  plant  as  in  our  opinion 
should  fullv  cover  these  items  of  cost.  The  estimate 
assumes  that  the  \Nork  will  be  conducted  witli  the  average 
skill  and  efficiency.  It  makes  no  allowance  for  possible 
changes  in  the  plan  or  scope  of  the  improvement  we  have 
outlined,  nor  for  changes  in  the  market  value  of  material 
and  labor.  No  allowance  is  ma  ie  in  the  estimate  for  pos- 
sible inii)roi)er  f)r  dishonest  administration;  nor  for  cas- 
ualties and  conlinccencie:,  which  can'iot  now  be  foreseen, 
but  which,  judfjini,'  from  our  expi'rience  on  work  of  simi- 
lar character,  -luuild  not  exceed  per  cent  upon  the 

total  we  have  rep Tted." 

I  do  not  a<,'ree  with  Mr.  Whinery  that  the  ent^incer 
is  no  Iietter  able  to  forecast  the  imcert:iin  contin}:;encies 
than  the  lawyer,  financier  or  man  of  business.  He  should 
know  better  iliaii  they  as  to  the  ranges  in  the  prices  of 
the  labor  and  materi.il  that  he  has  to  do  with,  better  a?-  to 
the  limits,  ability  and  skill  in  the  execution  of  this  kind 
of  work,  better  as  to  the  t::cneral  nature  (>f  tlie  fortuitous 
accidents  that  may  liajiijcn  and  the  ways  of  puardiiiL;' 
a^^'iinst  them,  and  Iietter  ns  to  the  prob.ahie  losses  lhrou).;;h 
dishonesty,  liecau -e  al!  of  tiiit  is  |)art  of  the  experience 
that  he  has  fjained  in  '!.e  execution  of  similar  work.  If 
he  has  not  done  similar  work  he  canno;  be  expected  tn 
make  a  trustworthy  estimate;  but  if  b.-  has.  he  is  naturally 
belter  able  to  forecast  the  chances  than  the  lawyer,  finan- 


I'OG 


7/7/;  ECOXOMICS  Of  MISISG 


i-RT  nr  mail  of  Iuimirss  who  has  had  im  Mich  cxpcrii'iici; 
at  all.  Ill  <ithcr  wurd.s,  the  niudcrn  tn^inccr  in  order  to 
i)e  successful  must  necessarily  he  a  man  of  husuiess  him- 
self; and  the  only  ground  f' ir  iilaciiiK  c  nhdince  in  the 
estimate  <>i  a  husiness  man  in  eni^ineenii!;  matters  is 
when  lie  is  something'  of  an  engineer  himself,  which  in 
fact  many  modern  husiness  men  are.  1  think  that  no 
hlamc  will  he  attached  either  to  the  engineer  or  husiness 
man  for  a  cost  in  excess  of  estimate  which  is  due  to  a  de- 
fakatioti  of  funds,  or  a  change  in  the  plan  and  scope  of 
the  work  after  the  estimate  was  made,  although  the  en- 
gineer may  even  foresee  the  possible  advisability,  or 
nccessitv,  for  making  certain  changes  from  the  original 
plans  and  can  also  estimate  in  advance  their  probable 
cost. 

I  think  that  Mr.  \\  hinery  rather  hedged  from  his 
original  position  when  he  presented  his  proposed  e.><- 
planatorv  note  to  acconij)any  an  estimate,  which  is  in  my 
opinion  fairly  well  expresses!,  except  it  does  not  go  (luite 
far  enough,  because  the  engineers  can  say : 

"We  have  based  our  figures  u,)'>n  the  p.-cseiit  market 
value  of  materials  and  labor  in  the  region  where  the  work 
is  to  be  done.  These  values  are  —  per  cent  alwve  (or 
below)  the  average  of  the  previous  5  (or  lo")  years.  The 
general  trend  of  the  market  has  recently  been  upward 
(or  downward).  The  jjroportion  of  lal)or  in  the  total 
estimate  of  cost  is  —  per  cent;  of  materials,  —  per 
c    it,  etc." 

Une  of  the  questions  that  is  frequently  asked  the  en- 
gineer is,  What  would  lie  the  effect  of  a  reduction  in  the 
prices  for  labor  and  material?  Plans  and  estimates  for  a 
certain  work  have  been  prepared.  The  work  has  been 
deferred.  A  year  later,  the  engineer  is  asked  what  \\ill 
be  the  cost  of  the  work  then.  A  large  work,  to  run 
through  a  series  of  years,  is  to  be  undertaken.  The 
prices  for  labor  and  material  are  bound  to  change  during 


/r.Vr7/.V/r/:A\V  r.STlM.ITliS  Ol-   costs      L'f.7 


that  piriud.  At  the  Ijc^iniiinj,'  tluy  may  Ik  at  tlu-  li.uot 
uii  rii'oril,  cli)>e  Id  licd-mck.  witli  cvcrv  jii'isiJi-ct  (jf  an 
upward  trend  in  the  markets.  The  cnj,nniiT  sIkhiM  know 
this;  it  is  his  Inisincss  to  know  it;  and  if  he  l)asc>  an 
estimate  on  the  minimmn  prices  he  is  as  niiicii  to  blame 
as  if  lie  were  at  error  in  iiis  qnantities. 

Mr.  W'hinery's  su.t,'L:estion  to  di>tinH:iiish  clearlv  be- 
tween the  mure  and  tlie  less  certain  jiarts  of  an  estimate  is 
praisesvurtiiy.  It  is  anaI<>j,'ons  to  the  discriminalinn  of 
'iKisitive  ore,'  'prolialile  ore'  and  possible  ore"  b\-  the  en- 
gineer vakiitii,'  a  mine.  I-'.ither  in  estimating  the  co,t 
of  a  works  or  the  vahu'  of  a  mine,  it  is  the  engmeer's  bnsi- 
iiess  to  e.\[)re>>  an  expert  ojiinion:  and  in  renderinjj  onl\- 
a  partial  opinion,  leavin;;  someone  else  to  draw  the  final 
conckision  in  order  to  shield  himself  fnnn  responsibilitv, 
he  is  derelict  in  his  diUy.  A  deliberate  overstiniatc  is  as 
reprehensible  as  an  underestimate.  The  commercial  pur- 
pose of  an  engineer's  estimate  is  not  merely  to  indicate 
how  much  money  is  i:;oinc:  to  be  required,  but  also  to 
serve  as  a  basis  for  calculation  of  the  probable  return 
on  the  money. 

There  are  plenty  of  enpincers  in  practice  who  are  altle 
to  estimate  closely  what  work  will  actually  cost,  as  proved 
by  experience.  They  command  la  -pc  fees,  and  properlv, 
for  their  work  involves  technical  and  l)usiness  knowledge 
of  the  highest  order.  The  financier  slionid  see  that  he  gets 
this  kind  of  engineer,  and  when  he  is  sure  that  he  has.  he 
should  be  careful  not  to  obtrude  liis  own  less  expert  knowl- 
edge. Fair  industrial  projects  are  not  infrequently  re- 
jected as  not  good  enough,  because  a  .soimd  engineering 
estimate  of  cost  is  increased  25  per  cnt,  _^3  1-3  per  cent, 
or  more  "on  general  principles"  by  the  business  man 
whose  previous  experience  has  been  gained  at  the  ex- 
pense of  defective  engineering  advice." 


GOLD   DREDGING   IN   CALIFORNIA 

By  Chas.  G.  Yalk 

(September  15,  I'.KH  ) 

The  following;  data  relative  to  costs  of  a  drcd.LCc  operat- 
ing at  (  )rovilK  .  I  al.,  are  tlie  averat;es  coverini,'  three 
years'  work,  and  are  taken  from  the  books  of  a  company: 

Size  of  In-ckets,  5  cu.  ft.;  average  speed  of  bucket.,  12 
per  minute;  avera^a-  bank  measure  per  month,  4'>,(M'^ 
cu.  vd. ;  avera',a'  hours  running  per  montli,  535  :  average 
kw.  lionrs  per  month,  23,995;  average  cost  of  power  per 
montli,  ^35').93;  average  cost  of  oil,  grease  and  sundries, 
$13. ji);  average  co-t  of  repairs,  $1,212.0);  average  ofilice 
anil  general  expenses,  $177.40:  average  labor  cost, 
•>4</'-33  :  average  depth  of  ground.  Ji)  ft. :  age  of  dredge,  3 
vears;  average  total  cost  of  o])erating,    4.H8C.  per  cu.  y<l. 

Takin-^  the  average  of  the  (  )roville  ground  at  iCk.  per 
cu.  yd.  ;ind  writing  ofT  10  per  cent  for  dtterioration  of 
the  dredge,  will  leave  a  net  of  14.4c.  jter  cu.  yd.  Deduct- 
ing cost  of  oi)eration  of  4.88c.  leaves  a  net  profit  of  0.520. 
per  cu.  yd.  on  all  the  property  cited,  and  a  net  profit  of 
$3_>,5S7  i)er  annum,  or  over  30  per  cent  interest  on  the 
ca[)ital  invested. 

I'nilahly  the  best  showing  that  can  be  made  as  to  low 
costs  i>  in  another  instance  at  <  )roville,  where  a  monthly 
statement  shows  that  50.760  cu.  yd.  were  dredged,  or  an 
average  of  1.^)92  en.  yd.  for  each  working  day,  at  a  total 
cost,  with  all  expenses,  of  i.(>(>c.  per  cu.  yd.  The  average 
yield  of  the  ground  per  cu.  yd.  was  18.9c.,  and  the  net 
profit  for  the  month  was  $7,744-  This  was  done  with  a 
5-ft.  continuous  bucket  dredge. 


M 


GOLD   DREDGING 

(October  ti,  I'.KH  ) 

The  Editor: 

SiK — In  your  issue  of  Septet. ibtr  15  we  note  an  erii- 
torial  j^'ivin^;  costs  of  f,oItl  dred^iii)^  ,it  ( )rovillo.  Having 
recently  had  occasion  to  invcst:jj;atc  this  matter,  we  take 
tiie  hberty  of  (luesiioning  tlie  accuracy  of  the  fgures 
given. 

'I  lie  cost  per  yard,  4..SHC.,  is  below  the  general  experi- 
ence of  this  ('i  trict.  Seven  cents  per  yard  would  he 
nnich  nearer  he  actual  operatinij  expense  of  the  5-ft. 
dredj;cs  now  in  use.  The  last  company  to  invatle  this 
field,  guided  by  the  previous  results  obtained,  has  al- 
lowed 8c.  per  yard  to  cover  operating  expense  and  depre- 
ciation, the  latter  item  being  estimated  at  about  ic.  per 
yard. 

The  statement  of  23.0<j5  kw.  hours  per  month  is  less 
than  lialf  of  any  figures  that  have  heretofore  come  to 
light.  Labor  at  $4iX>  per  month  is  also  much  below  the 
best  results  so  far  obtained.  There  are  several  instances 
where  dredges  have  been  operated  for  a  month  or  more 
at  a  cost  of  less  than  4c.  per  yard,  but  estimates  of  costs, 
yardage,  etc.,  from  periods  of  one  month  arc  entirely  mis- 
leading. Repair  exi)enses  range  from  one-ouarter  to 
one-half  the  total  cost  of  operations,  and  for  many  months 
they  may  be  comparatively  small.  This,  of  course,  will 
give  a  large  yardage  and  low  monthly  expense.  Conse- 
quently the  cost  per  yard  will  be  much  below  the  normal. 
On  the  other  hand,  a  month  when  much-  repairing  and 
renewal  of  dredge  parts  took  place  will  give  a  low  yard- 
age and  a  high  monthly  operating  expense,  giving  costs 
per  yard  much  above  the  average. 

One  dredge  at  Oroville  ran  continuously  for  eight 
months,  making  a  sjilcndid  lecord,  and  then  shut  down 
39  (lavs  for  repairs.     The  fact,  tiicrefore,  is  obvious  that 


MICROCOPY    RESOIUTION    TEST    CHART 

ANSI  a.id  ISO  TEST  CHART  No    2 


1.0 


I.I 


Jii  in  III  2.5 

150      ""^"^  11111  = 

■32 

36 


I-     am 


140 


2.2 


1:11= 


2.0 


1.8 


1.25 


1.4 


^  APPLIED  IM/^GE  Jnc 

=^  :   I    Mom   Stfe#t 

\^  ■■■'.    New    To'h         U609        uSA 

=  ,ai  -  03OO    -  Phiin* 


:7o 


Tin--   r.COXOMICS  Of  MI.MXC 


costs  per  van!  are  reliable  only  when  periods  of  a  year  or 
more  are  cnisidereil. 

The  present  tendeney  is  to  increase  the  size  of  the 
buckets  and  the  stren};tli  of  the  wearin.;  |)arts.  This  in- 
creases tile  yardat;e.  with  ])ractically  the  same  labor 
charge,  and  a  less  than  proportional  increase  in  the  ex- 
pense for  jiower  and  repairs.  It  is  expected  that  the  im- 
proved dredj;es  ca])able  of  handlintj  $80,000  cu.  yd.  ant! 
upward  per  month  will  reduce  the  costs  to  5c.,  and 
lower,  ])er  yard,  but  this  cannot  be  done  with  dredges 
having;  a  capacity  of  only  46,000  yards  per  month. 
Yours  respectfully, 

Stebbins  &  Smith. 

San  Francisco,  September  22,  1(^4. 

[Tliis  criticism  is  made  fairly  and  with  some  reason. 
Wc  can  quote  average  costs  and  yield  for  a  well-known 
dredging  company  at  Oroville,  which  has  been  in  opera- 
tion for  5  years  The  average  cost  for  each  year  has 
ranged  between  4.92c.  and  7.47c.,  averaging  6c.  for  the 
whole  period ;  the  yield  has  averaged  13c.  per  yard. — 
Editor.] 


MINING  IN  MISSOURI 

(November  3,  ia04  ) 

The  Editor: 

Sir— In  Missouri  there  are  two  important  mining  dis- 
tricts. The  Joplin  district,  in  the  soutiuvest,  is  the  iarpest 
producer  of  zinc  in  the  United  States.  The  mines  of  St. 
Francois  county,  in  the  southeast,  rank  that  district  as  the 
second  lar<,a'st  producer  of  lead.  The  JopHn  district  is 
also  a  considerable  producer  of  lead  froin  ore  concen- 
trated, as  a  by-product,  in  the  milling  of  the  zinc  or^- 
Such  comparisons  as  are  to  be  made  in  this  letter  are  not 
for  the  purpose  of  pointing  out  the  relative  merits  of  the 
two  districts  as  fields  for  mining  operations,  but  merelv 
to  show  in  a  striking  way  the  baneful  results  of  the  labor 
union  policy  as  applied  to  mining.  Everyone  knows  what 
the  results  have  been  in  Colorado,  but— fortunately,  lack- 
ing the  gloomy  record  of  outrage  and  bloodshed— Mis- 
souri presents  the  more  instructive  industrial  picture  of 
"before  and  after,"  which  it  can  show  contemporaneously. 

The  ore  mined  at  Joplin  yields  on  the  average  about 
4.5  per  cent  of  blende,  worth,  say,  $35  per  ton,  under  the 
normal  conditions  of  the  present  time,  and  0.5  per  cent 
galena,  worth,  say,  $50,  or  an  aggregate  of  5  per  cent  of 
mineral  worth  about  $36.50.  The  ore  mined  at  Bonne 
Terrc  and  Flat  River  yields  about  5  per  cent  of  galena, 
worth  about  $37.25  per  ton  f.o.b.  mines,  when  lead  is 
at  4c.  St.  Louis.  At  Joplin  there  is  great  and  general 
prosperity.  In  St.  Francois  county  the  mining  companies 
are  struggling  along  at  little  or  no  profit,  hoping  vainly 
for  an  amelioration  in  the  conditions.  It  is  strange  that 
ore  of  the  same  grade  and  value  can  be  worked  profitably 
at  one  place  and  cannot  be  worked  profitably  at 
another  place  m  the  same  State,  especially  when  the 
physical  conditions  are  all  apparently  in  favor  of  the 
unprofitable  mines. 

At  Joplin  there  are  comparatively  small  lenses  of  ore 


27::  Till-.  liCUXOMICS  01-  ML\'L\'G 

an.l  .-licet  deposits,  avcrat;ing  uiily   about  <S   ft.  in  thick- 
ness, the  mineralized  yroinul  beinj;-  the  hardest   kind  of 
chert.     The  mines  arc  worked  in  a  crude  kind  of  way; 
oiieiied   by   tmall   shaits,   hoisting?   ore   ni    small    tubs   by 
means  of  unecunoniical  engines,  and  dressing  the  ore  ii> 
ramshackle    mills    of    comparatively    small    capacity,    the 
entire  cost  of  opening  a  mine  and  equipping  it  with  plant 
to  treat  lo  tons  per  hour  being  only  about  $i5,cxjo.     At 
I'.onne  Terre  and  llat  River  there  are  immense  shoots  of 
nre,  affording  stopes  of  20  ft.  to  80   ft.  in   height,  and 
width  almost  to  suit;  the  ore  an  easily  mined  dolomite, 
-round  of   character    reiiuiring   no   timbering,    depth   of 
mines  only  slightly  greater  than  at  Joplin,  and  no  greater 
inllu.\   of  water,   except   in   two  or   three   instances;  the 
mines  opened  by  line  large  shafts,  cMiuipped  with  nearly 
the  most  modern  facilities;  the  ore  dressed  in  complete 
and    costly    mills    of    500    to    1,500    tons    daily    capacity. 
Surely    St.   Francois   county    has   all    the    advantages   of 
physical    condition,    and    theorelically    ought    to    .surpass 
foi>lin   in   operating   costs.     The   explanation  of    why   it 
does  not,   involves  some  technical   factors,  but  the  chief 
cause  is  to  be  found  in  the  character  of  the  miners  and 
their  work. 

The  mines  of  St.  Francois  county  used  to  make  money. 
The  mininuim  price  of  lead  in  the  history  of  that  metal 
did  not  Slop  them,  and  they  have  shown  go(,d  jjrofits 
when  lead  was  considerably  less  than  4c.  per  lb.  This, 
however,  was  before  the  labor  union  was  organized  m 
the   district. 

I'he  mines  of  St.  Francois  county  are  operated  by  large 
companies.  The  cost  of  opening  and  equipping  a  mine 
there  is  so  large  that  a  company  with  abundant  capital  is 
rcciuired.  I'or  that  reason  there  is  no  leasing  nor  any  in- 
dividual operations.  The  condition  of  the  miners  was 
good:  they  were  paid  high  wages,  as  compared  with  the 
scale   for  other   trades  in  that  part  of   the  country;  the 


il//.\7.\(;  /.\-  MISSOURI 


27.] 


(lay's  work  of  lo  hours  was  no  lonj^cr  tlian  was  required 
of  other  artisans;  the  mines  were  sanitary  and  in  no 
way  especially  dangerous;  the  men  were  well  cared  for 
i'v  the  •  iipanies.  The  entire  niininj;  district  is  pleas- 
antly situated,  far  more  pleasantly  than  the  averajje. 
The  climate  is  pood;  all  the  conditions  of  livinp  are 
pood.  The  men  were  well  satisfied,  and  -  peneral  air  of 
prosperity  pervaded  the  entire  district.  This  was  before 
the  diseases  of  iniionism  and  socialism  were  contracted. 

In  'he  struggle  which  ensued,  the  unions  were  vic- 
torious. The  companies  made  no  fight  in  line,  shoulder 
to  shoulder.  Some  of  them  made  no  fight  at  all,  and  sur- 
rendered without  a  shot.  The  others  fought  alone,  one 
by  one,  and  were  overwhelmed  one  after  the  other.  The 
unions  won  an  increase  in  wages,  a  reduction  in  working 
time  to  8  hours  per  day,  and  the  victor's  right  to  despise 
the  conquered,  which  in  successful  labor  wars  takes  the 
form  of  cheating  the  employer  in  the  work  that  he  pays 
for.  The  amount  of  work  done  per  hour  at  Flat  River 
is  materially  less  than  before  the  advent  of  the  union. 
This  is  the  chief  reason  why  the  mines  of  southeastern 
Missouri  are  not  making  money. 

Joplin  has  never  been  tainted  with  unionism.  It  has 
always  been  the  great  camp  of  the  small  miner.  The  capi- 
tal required  to  oi)en  and  operate  a  mine  there  is  not  large, 
and  the  operators  themselves  to  a  large  extent  take  hoM 
and  work  with  their  men.  Every  hired  man  wears  on  his 
!uad  the  hat  of  a  future  operator.  He  saves  his  money, 
an<!  sooner  or  later  docs  some  prospecting  on  his  own  ac- 
cotnit.  If  he  is  lucky,  good  for  him.  If  he  is  unlucky, 
he  goes  back  to  work  until  he  can  save  enough  to  try  'it 
again.  Everybody  works  hard— works  hard  everv  minute 
ot  the  day— and  when  the  day's  work  is  done  he  seeks 
enjoyment  in  such  way  as  most  appeals  to  him.  The  gen- 
eral aspect  <,f  things  at  Tr>plin  ,ind  Flat  River  show'^  at 
lirst  sight  tliat  the  Jojili,,   man  has  the  more  fun.     The 


274 


THE  I-.COSUMICS  Ol'  MIXING 


man  who  lias  dune  a  good  .s(|uarc  da_v"s  wurk  is  better 
calcidated  to  enjoy  himself,  anyway,  than  the  man  who 
has  listlessly  loafed  ihrongh  his  task.  And  the  Juplin 
men  certainly  work.  A  pair  of  men  break  more  to  the 
drill  in  their  iiard,  lliniy  .i^nmnd.  with  no  very  high  breasts 
to  stope  on,  than  the  b'lat  River  man  breaks  in  hi.s  niag- 
niheeut  chambers  in  limestone;  and  when  it  comes  to 
slioveling  and  tramming,  there  is  no  comparison  at  all. 
Xor  has  the  former  any  kind  company  to  provide  him 
with  lavatories  and  lockers,  look  out  for  his  safety,  and 
pay  him  damages  for  unavoidable  accidents.  The  Joplin 
man  simply  takes  his  chances — often  they  are  big  chances 
— ])uts  in  an  honest  day's  work,  and  gets  on  in  the  world 
if  ther;  is  anything  in  him  at  all.  Hut  Joplin  has  no 
union.  Joplin  has  tb.e  liest  American  spirit,  and,  conse- 
quentlv,  Jnplin  is  iirospcriius,  and  can  mine  5  per  cent  ore 
with  little  tubs  and  ramshackle  mills,  and  make  money  ; 
while  the  far  greater  deposits  of  an  equally  valuable  ore 
in  St.  I'rancois  county  cannot  be  made  to  pay  a  reasonable 
return  on  the  capital  rccpiired  to  work  them. 

\V.    R.    IXG.XLI.S. 

New  York,  October  18,  1904. 


SECRET   RESERVES 

(Eilitorial,   November  24.    1904.) 

London  and   Kalgoorlit-  arc  perturbed  at  the  present 
time  over  the  riglu  and  wrong  of  a  practice  which  in  dif- 
ferrnt  forms  is  familiar  to  mine  managers  elsewhere  ;  we 
refer  to  the  mamtenance  of  a  reserve  intended  to  e.iualizc 
a  variable  output.     This  question  was  discussed  in  our 
issue  of  May  12,  1904,  by  Mr.  F.  H.  Bathurst,  of  the 
Melbourne  Ar;:us;  but  that  well-known  authority  on  min- 
ing matters  dealt  with  the  problem  in  its  more  local  as- 
pects, as  exemplified  by  companies  operating  in  Victoria 
However,  the  principle  involved  is  the  same.     The  im- 
portance of  it  from  a  financial  standpoint  has  been  em- 
phasized by  the  Boulder  Perseverance  fiasco,  an  inquiry 
into  which  has  elicited  the  fact  that  a  reserve  of  20000 
oz.  of  gold-say,  $40o,ooo-was  held  at  the  mine;  from 
this  store  of  unreported  bullion,  it  was  the  custom  to  take 
three  or  four  thousand  ounces  at  a  time  in  order  to  in- 
crease the  monthly  returns  when  these  fell  off.     In  loon 
the  actual  output  of  the  mine  was  209,206  oz.,  but  the 
output  declared  was  219.923  oz.     In  January,  1904.  the 
actual  output  was  12.426  oz. ;  hut  ,7,471  oz.  was  sVated  to 
be  the  production  of  the  mine  for  that  month.    In  the  first 
three  months  the  secret  reserve  of  bullion  was  depleted 
to  the  extent  of  10,000  oz.     During  the  first  six  months 
of  the  current  year  it  became.manifest  that  the  mine  coul.l 
not  maintain  a  rate  of  output  based  upon  a  certain  esti- 
mate of  ore  reserves:  but  the  gradual  falling  off  was  ob- 
sctired  by  doctoring  the  returns  in  the  manner  described 
iintil  finally,  the  secret  reserve  being  exhausted,  the  facts 
had  to  come  out,  and  there  was  a  collapse,  as  injurious  to 
the  professional  men  connected  with  the  management  as 
It  was  distressing  to  shareholders  who  had  bought  stock 
at  a  price  based   upon  a   fictitious  production.      In    the 
course  of  an  official  inquiry,  the  statement  was  made  that 


'_'7t;  nil'-  lA'OXO.MICS  ()!■   M!\'I\'(- 

Ihc  Drnva-r.rowiihill,  a  i;nai  irnl.l  mine,  tli.irmighly  well 
mana«,n-(l.  gave  out  niomhlv  returns  sc  uniform  in  thetr 
amount  that  the  services  of  a  secret  reserve  were  mani- 
fest. It  was  also  stated  that  this  practice  was  usual  m 
Western  Australia. 

Before  proceeding   further,   let  it  be  emphasized    tliat 
Western  .\ustralia  is  not  the  one  corrupt  spot  in  the  mul- 
ing world  ;  it  has  had  several  unsavory  scandals,  and  U 
ha'^s  been  the  victim  of  a  number  of  unscrupulous  cam- 
paigns, waged  both  on  the  i)ear  and  the  bull  side  of  the 
market.     This  is    '-le  not  to  anv  inherent  Westralian  de- 
pravitv,  but,  as  is  obvious  to  men  of  experience,  to  the 
unusual  richness  of  the  orebodies,   a   richness   which   .n 
nature   is   concomitant   with   irregularity   of   tjccnrrcnce. 
As  against  these  troubles,  so  hurtful  to  the  advance  of 
mining   as  a  legitimate  business,   must  be  place.l   a  big 
credit  for  honest  management,  technical  skill  and  unre- 
mitting energy,  on  the  part  of  a  handful  of  technical  men. 
both  English  and  American,  without  whom  the  Westra- 
lian mining  conii)anies   would  have  been  in  a  bad   way 
indeed.    In  brief,  human  nature  being  the  same  the  world 
over,   mines   characterized  by   rich  and   erratic  orebod.es 
afford  the  ma.ximum  of  temptatir:-.  to  wrong-doing. 

A  iUictuating  output  and  a  secret  reserve  represent  a 
state  of  e(iuilibriuin  comparable  to  a  powder  magazine 
enclosing  a  small  boy  armed  with  fireworks.  We  are 
aware  that  the  gold  is  not  necessarily  luhl  in  a  vault :  it 
is  the  custom  to  realize  upon  it  and  to  carry  a  balance  at 
the  bank,  transfers  from  which  effect  the  purpose  of  reg- 
ulating the  returns  as  reported  ;  but  even  though  burglary 
of  bullion  is  noi  involved,  a  theft  no  less  vital  is  always 
on  the  cards— the  loss  oi  one  man's  reputation  or  an- 
other's propertv  as  expressed  in  share  values.  Take  the 
case  in  point;  the  absentee  manager  of  the  Boulder  Ter- 
severance  has  had  to  suffer  from  statements  of  output 
which— explain  it  as  you  will— were  false.     To  go  fur- 


s/:ch'i:r  i<i  si.Rn-.s 


tlur,  llic  iiian;i<,'tnK'iit  of  ilu-  (  )r('\a-i;ri'\\  iihill  is,  we  be- 
lieve, opcratiiif,''  that  iiiitir  witii  ;i  \ir\v  in  si-rvinp  existinif 
sharcliolders  ;  and  if  a  re.^crvi'  is  ktpt,  it  is  for  tlie  pur- 
pose of  avoidiiif^  such  Ihictuatious  ;is  rcudir  sliarehoMrrs 
anxious.  It  is  more  than  likJ\,  however,  tliat  iti  thi-; 
case  the  ()ossession  of  certain  slopes  of  extraordinary 
ricliness  renders  it  tmtiecessary  to  store  Iju'.Iion  in  the 
safe  or  to  carry  a  corres[ion(hiv^r  balance  at  tlie  banker's. 
Iti  any  case,  a  remedy  for  vaiiation  in  the  yield  can  be 
secured  by  nuthfuls  less  darij^erous.  In  tliese  company 
matters,  publicitv  is  tlie  best  preventative  of  wron^- ;  secrecy 
is  its  incubator.  State  your  output,  whatever  it  may  be; 
if  you  have  a  block  of  ground  unusually  rich,  say  so;  if 
you  carry  a  reserve  of  bullion,  state  that  fact ;  publish  the 
amount  of  special  ore  wiiich  may  have  been  stoped  dur- 
ing the  month  or  the  quantity  of  bullion  transferred  from 
the  reserve  in  order  to  sweeten  the  returns.  In  short, 
have  your  reserve,  init  get  rid  of  secrecy ;  maintain  a 
steady  output,  but  state  how  it  is  done.  If  not,  cease 
monthly  reports,  which  disturb  timid  shareholders  bv  rea- 
son of  their  fluctuation,  and  issue  half-yearly  reports 
with  interim  records  of  progress.  Surely  silence  is  bet- 
ter than  falsehood.  A  policy  of  straightforward  frank- 
ness, accompanied  b_>  the  fullest  publicity,  is  the  onlv 
cure  for  the  present  condition  of  affairs  at  Kalgoorlie ;  it 
is  as  necessary  as  fresh  air  to  an  invalid. 


EQUIPMENT  AND   ORE-RESERVES— V. 

1  lie  discussion  on  the  prnpcr  ratio  t)t.iuci.'n  nunc 
cquipnuiu  ami  orc-n. servos  is  taken  up  ay;ain  in  this  issro 
hy  an  L'nj:,Mnccr  whose  experience  f;ives  special  value  to 
liis  o!)servations.  Previous  contriijutions  on  this  suhjcct 
have  !)rouj;ht  out  two  poiius  of  view,  which,  natu/ally 
enou^'h,  are  held  to  re[iresent  tlie  opposite  standpoints  of 
fuiancia!  surety  and  practical  niinin^^;  the  quo  a>ks  lor  the 
niaxiimnn  security  consistent  with  a  reasonable  rate  of 
interc-t ;  the  other  demands  the  larpest  pain  in  the  least 
time.  .Mr.  Curie's  now  famous  requirement  of  a  r«-per- 
cent  reserve  represents  the  investment  view;  while  Mr. 
Hoover's  insistence  on  the  increment  of  profit  due  to 
rapidity  of  extraction  expresses  the  intention  to  get  the 
largest  amount  of  money  out  of  a  given  body  of  ore. 
As  a  matter  of  fact,  any  discussion  of  these  di (Terences 
of  opinion  will  continue  to  be  at  cross  purposes  until  it  is 
realized  that  only  one  form  of  ownership  is  coiUemplatcd, 
namely,  that  of  a  limited  liability  company,  organized  and 
conducted  under  certain  recognized  conditions.  If  the 
mine  i;-,  owned  by  an  individual  who  has  no  intention  of 
selling  it,  tite  problem  is  simplitled;  tliere  is  no  share 
quotation  to  maintain,  no  diversity  of  interests  to  please, 
no  directors  to  educate,  and  no  financial  press  to  consider. 
It  becomes  simply  a  question  of  logical  method,  striving 
to  make  the  most  money  out  of  the  ore  deposit ;  the  aim 
will  be  to  avoi<l  the  wastefulness  of  an  extraction  so  slew 
as  to  allow  ore-reserves  to  remain  underground  unreal- 
ized, while  fixed  charges  consume  small  profits,  or  the 
extravagance  of  an  exploitation  under  which  the  incre- 
ment of  profit  due  to  rapidity  of  extraction  becomes  over- 
wlielnied  by  the  interest  to  be  paid  on  an  eciuipment  the 
services  of  which  are  soon  ended  by  the  exhaustion  of 
the  mine.     The  fact  is,  we  do  not  (juile  appreciate  how 


Ilnril'MliST  .1X1)  C'A7,-A7;S7;A';7;.V 


_'.:i 


greatly  mir  imtliuils  iirc  ilMmmatnl  by  tin-  flnctii.-ititi!,'- 
ownership  of  mines;  sIiarelnlikTs  furni  a  dissolvinf,'  liody 
of  i)roprietnrs  tin-  interests  of  wliom  are  cliverL,'ent  ac- 
cording as  they  liave  bought  as  investors,  to  liold  indefi- 
nitely, or  as  speculators,  to  sell  on  the  next  rise. 

fo  tile  iiivestnr,  ore-reserves  are  an  insurance;  and, 
even  thiiugli  tlie  opening  up  of  an  excessive  area  of 
ore-hearing  ground  represents  the  expenditure  of  caiiital 
n.  .t  innnediately  rennnnTative.  he  feels  that  the  added 
expense  is  worth  the  additional  security.  The  siteculator 
buys  to  hold  lor  a  time,  until  he  lias  a  reasonahle  protit ; 
hut  in  any  event  he  does  not  contem])!ate  retaining  his 
holding  until  the  hitler  end — when  the  mine  is  worked 
(iUt.  To  him  completeness  of  e(|uipment  with  capacitv 
to  extract  rajjidly,  at  least  as  rajjidly  as  the  opening  up  of 
new  ground,  affords  the  results  most  to  his  liking — a 
rising  ([notation,  an  increased  dividend,  and  a  proximate 
disposal  of  his  holding  at  an  enhanced  price. 

We  can  illustrate  this  view  of  the  matter  by  quQfmg 
the  case  of  a  company  which  carries  a  year's  outi)ut  in  the 
shape  of  broken  ore;  apart  from  reserves  in  the  f(  '•m  of 
blocks  of  ground  not  \et  mined,  there  is  this  big  toimage 
of  ore  already  mined  lying  in  the  slopes.  l''rom  the  in- 
vestor's slandi)oinl— Mr.  Curie's — this  is  insurance  of  the 
best  Kind;  for  ohviinisly  ore  actually  stoiied,  sampled,  and 
assayed  can  be  appraised  with  an  accuracy  not  possible 
when  it  is  in  place  in  the  lode.  As  the  speculating 
shareholder  .sees  it— as  Mr.  Hoover  would  regard  it— 
this  is  just  .so  much  money  lying  idle  underground,  on 
which  not  only  is  there  no  interest  forthcoming,  but  it 
requires  a  constant,  though  small,  expenditure  in  the  way 
of  maintenance — that  is,  limbering,  ladderways,  tracks, 
etc.  It  is  here  that  we  disagree  with  Mr.  Curie — sound 
as  his  views  are  on  most  matters  of  mining  finance.  We 
consider  that  mining  cannot  be  safeouarded  to  the  extent 


■.(  „i;. 


280 


77//:'  liCO.\OMlCS  Ui   Ml.MSC, 


l)v  tliiiiaiiiliiiL,'  a  itrtain  rritii)  of  ori'-ri'SiTvis  ami  a  speci- 
fied rate  "f  (lui'knd.  yoii  can  make  a  iiiinini;  investnutii 
as  safe  a~  a  railrnad  li.-ibl  I'.y  vigorous  iKmIi  ipiiKiii.  li_\ 
acciimulaiiii^;  ht'kui  ore.  ami  by  eiilar,i;m^  ilie  l)in>,  you 
decrease  tlie  uncertaiiity  :  hut  the  ri>.k  remains — it  is  the 
essence  of  minint;.  'I  herefore,  the  increased  eiimpmeiu 
and  the  taster  extraction — with  the  concurrent  advance  of 
ileveiopment.  a  lari,^^T  (Hvidend  and  a  smaller  ore-re-erve 
— represent  tile  MiumUst  kuid  of  ininini,'.  Under  coni- 
panv  nianayement.  that  rate  of  extraction  in  which,  as 
Mr.  Hoover  claims,  the  increment  of  profit  due  to  en- 
lar_i;ed  e(iuipment  halances  the  amortization  of  the  addi- 
tional capital  invested  in  the  e(|tiipnient.  .L;ives  the  lluctu- 
atiiif,'  ownership  the  hest  return.  It  thi>  is  accompanied 
hv  accurate  peril xlical  estimates  of  res.rves,  hy  a  frank  and 
freipient  record  of  pro<.;re>>.  and  li>'  a  manat,'ement  which 
does  not  huv  or  sell  the  shares  of  the  mine  under  it-;  di- 
rection, there  is  achieved  the  most  prolitable  form  of  busi- 
ness known  to  the  modern  world. 


SECRET   RESERVES 


( l)ttcii;(icr     I,     tyo4.) 

Ill  rij^ard  to  thiij  rnatttr,  wliich  was  discussed  in  our 
editorial  columns  last  week,  it  us  interesting;  tu  not-  tli- 
views  of  four  kadint;  mine  managers  at  Ka'g  inrlie, 
as  elicited  by  a  Royal  Cumnimisaion  which  is  [)rubmg  the 
Boulder  i'erseverance  scandal. 

In  cours.  ■>!  his  evidence,  Mr.  Richard  Hamilton,  man- 
ager of  the  Great  lioulder  Proprietary,  depused  on  ojth : 
"It  is  the  custom  of  most  of  the  mines  here  to  have  a  bul- 
lion reserve.  I  think  it  is  very  a'lvisai)le  to  have  one  to 
kee[)  the  returns  even;  it  prevents  lluctuations  in  the  mar- 
ket, and  enables  you  to  work  tlie  mine  cheaper.  If  you 
had  to  keep  the  returns  even  by  taking  the  ore  out  of  the 
mine,  you  would  not  be  able  to  do  straightforward  stop- 
ing.  The  amount  of  the  bullion  reserve  should  depend 
upon  the  character  of  the  mine,  but  half  a  month's  return 
would  be  a  fair  thing.  Our  reserve  is  kept  locally.  If 
you  did  not  keep  a  reseive  you  might  have  a  25  per  cent 
or  30  per  cent  variation ;  such  a  fluctuation  would  affect 
the  market  pro!)al)ly  to  the  detriment  of  the  shareholders. 
I  am  in  favor  of  limiting  the  reserve  to  half  the  month's 
output.  The  bullion  reserve  does  not  show  in  the  yearly 
balance-sheet  in  every  case ;  the  control  of  the  bullion 
reserve  is  generally  left  to  the  manager.  I  have  not  had 
any  definite  instructions  to  keep  up  a  normal  output.  The 
directors  do  not  always  know  of  the  bullion  reserve.  The 
Chamber  of  Mines  has  rcconur.ended  that  bullion  re- 
serves be  kept,  but  with  no  limitations  as  to  the  amount. 
I  am  in  favor  of  giving  every  opportunity  to  shareholders 
of  acquiring  information  about  the  mines:  I  would  not 
let  them  know  what  the  bullion  reserve  was.  I  think  de- 
velopments should  be  announced  here  simultaneousiv  with 
London :  I  wouUl  also  give  publicity  to  the  assay  plans. 


nr^A    11  '/M il/1    iin'tl->VinI*-4    r> r\*- Vt « r 


K,tf  ti,^  K,,n:^ 


282 


JUL  liCOXOMJCS  Ul-  MIMXo 


nut  see  that  it  is  iKCissary  to  have  local  directors;  tlioic 
who  suliscribc  the  capital  naturally  want  control  of  the 
mine.  There  lines  not  seem  to  be  a  \ery  lart;e  body  of 
investors  in  Western  Australia;  W  estralia  would  derive 
greater  benefit  by  having:;  the  mine  offices  where  the  capi- 
tal is  available.  1  do  not  think  }ou  recjuire  any  more  legis- 
lation than  you  liave  at  present  to  prevent  mining  scan- 
dals ;  Royal  connnissions,  such  as  the  present,  would  act 
as  a  greater  deterrent  than  in  enacting  fresh  legislation." 
Mr.  Hamilton  gave  a  description  of  his  sampling  meth- 
ods, saying  he  generally  took  samples  not  more  than  to 
ft.  apart. 

Mr.  Robert  D.  Nicholson,  the  manager  of  the  Ivanhoe, 
in  the  course  of  iiis  statement,  said;  "1  am  in  favor  of  a 
bullion  reserve.  In  a  nune  like  the  Jvanhoe  it  is  (juite  possi- 
ble! to  have  a  variation  of  25  per  cent  in  the  ouii)ut,  and 
that  would  be  detrimental  to  investing  shareholders.  In 
a  mine  like  the  Ivanhoe,  where  we  get  slides,  the  fluctua- 
tions are  considerable.  I  thiik  75  per  cent  of  the  month's 
output  is  a  fair  thing  for  a  bullion  reserve.  The  directors 
know  exactly  what  the  output  is ;  it  is  not  desirable  to  let 
the  shareholders  know  the  actual  figures.  The  bullion 
reserve  is  merely  to  regulate  the  monthly  output.  Two 
of  the  officials  on  the  mine  beside  myself  know  what  the 
reserve  is.  The  holding  of  the  reserve  makes  the  costs  of 
mining  chea]xr ;  for  instance,  you  would  leave  a  lot  of 
low-grade  stuti'  behind  you  if  you  had  no  bullion  reserve 
to  work  on."  Mr.  Xicholson,  in  tlescribing  the  sampling 
practice  on  his  nunc,  said  he  took  assays  every  3  ft.,  cut- 
ting everything  above  5  oz.  down  to  that  figure  m  calcu- 
lating averages.  He  continued:  'T  tlnnk  the  public  gen- 
erally shiiuld  ha\e  access  to  the  mine.  Tliev  luue  access  to 
the  Ivanhoe;  we  will  show  them  the  assay  plans  up  to  the 
dale  the)  are  receiveii  in  London;  we  publish  all  iniorma- 
lion  here  simultaneou-ly  with  London.  1  do  not  think  it 
wouli!  be  wise  t<j  legislate  that   ore-reverses    should   onh' 


siiCKirr  h'/:s/:h'ri:s  -jh:'. 

'V  Ihnsc  opened  up  01!  tliroc  sides;  it  should  be  left  to  the 
<hscrction  of  the  manager.  What  is  rcallv  wanted  is  tlie 
puhhshuig  here  of  th,.-  forMiigluIy  rei..rts.  giving  widths 
and  vahies;  we  do  it  on  the  Ivaniioe." 

AJr.  Frank  A.  Moss,  general  manager  of  the  Kalgurli 
and  Hamault,  .ieposed :  "The  Kalgurli  differs  from  most 
mnies  on    the   field.     W'e  have   verv  big   lodes,   but   no 
definite  hn^  of  lode,  and  unless  we  had  a  bullion  reserve 
we  would  have  a  bad  time."     (Witness  produced  a  plan 
showmg  a  stope   n^o  ft.  long  and  132  ft.  wide,  and  ex- 
plamcd  to  the  Commission  that  in  working  sueh  a  big  ore- 
body  It  was  impossii)le  to  maintain  an  even  return  )     "In 
January  our  output  was  5,800  o?. ;  probably  six  months 
later  it  would  be  2,800  oz.     Still,  our  shares  never  fluc- 
tuate, and  that  is  due  to  the  use  of  a  bullion  reserve  ■  a 
mouth's  bullion  reserve  is  quite  sufficient  for  i;s  Vo  main- 
tain an  even  output.    We  do  not  expose  ore  on  three  sides 
in  our  mine  :  we  go  by  what  we  have  taken  out.    Supposing 
we  take  20,000  tons  out  from  20  ft.  in  height,  and  it  goes 
17  'Iwt..  we  reckon  the  next  20  ft.  sliould  be  something 
the  same.     No  hard-and-fast  rule  r  ,  regards  estimating 
ore-reserves  would  apply  to  the   Kalgurlie.     We  have  a 
stope  65  ft.  wide  at  640  ft.,  and  at  700  ft,  it  is  5  ft   wide  • 
80  ft.  south  of  that  it  is  80  ft.  wide  at  the  700  ft.    My  es- 
timates, so  far.  have  worked  out  correctlv.     If  any  per- 
sons wanted  to  sample  the  Kalgnrli  it  would  take  them 
12  months;  they  wouM  have  to  shoot  the  stopes  out  to 
do  It.     In  the  Kalgurli  I  would  not  take  samples  even  in 
5-tt.  .sections;  for  instance,  in  one  face  we  may  be  on 
lo-dwt.  ore.  and  the  next  cut  might  give  us  5  oz      My 
instructions  are  that  the  mine  plans,  assavs,  etc..  are  to  be 
open  to  the  public." 

Mr.  fieorge  M.  Roberts,  manager  of  the  Associated 
Xorthern  illocks.  deposed:  "I  think  it  is  essential  to  have 
a  bullion  reserve  ecpial  to  half  tlie  month's  output  ■  values 
in  these  mines  arc  very  erratic;  in  the  event  of  legislation 


■2^1 


JUL  l:tU.\UMlLS  01-  MIMXG 


1  would- say  a  ninmir.s  reserve.  There  are  about  2tx)  ft. 
of  country  in  our  mine,  orc-ljeariii,^,  carrying  lenses  of 
ore  ;  face  samples  are  very  mi>lea(ling  in  our  case,  and  it 
is  a  difficult  mine  t'  reckon  up  the  ore  reserves.  1  would 
U'A  make  evn  a  iireliminary  report  on  samples  taken  50 
ft.  ai'art;  it  would  he  useless.  1  would  like  to  sample 
at  least  every  10  ft.,  and  then  compare  my  results  with 
the  mine  assays:  if  I  were  buying  a  mine  1  would  sample 
every  3  ft.  I  am  in  favor  of  a  mine  being  worked  cnienly  ; 
our  mine  has  been  open  to  the  public  ever  since  I  tex)k 
charge.  1  consider  the  keeping  of  a  bullion  reserve  as- 
sists us  in  cheap  mining." 


MINE  EQUIPMENT  AND  ORE-RESERVES 

(December    i.     1904.) 

'I'lie   Editor: 

Sir — If  a  tew  vvurds,  rather  late  in  the  day,  can  be 
granted  mc,  1  would  like  to  submit  a  consideration  of  the 
dit^'erence  between  the  policy  advocated  by  Mr.  Hoover 
and  that  urged  by  Mr.  Curie.  This  difference  is  partly 
fundamental,  and,  in  part,  one  of  premises.  Mr.  Hoover 
says:  "It  will  be  granted  that  the  true  objective  of  min- 
ing is  to  gain  the  greatest  profit  from  a  given  body  of 
ore."  Mr.  Curie,  using  mining  as  a  generic  term,  em- 
bracing finance  as  well  as  practical  management,  answers 
"that  the  greatest  technical  economy  is  one  thing  and 
financial  security  another,  that  high-pressure  development 
and  the  economic  limit  of  reserves,  while  satisfying  the 
one,  arc  in  contravention  of  basal  principles  of  the  other," 
and  further,  that  capital  being  the  first  essential  of  opera- 
tions, "those  who  pay  the  piper  must  call  the  tune." 

This  assumption  of  the  opposition  of  practical  mining 
and  finance  is  so  much  of  a  facer  for  those  engineers 
who  are  trying  to  reach  the  most  economical  basis  of 
operations  that  it  is  worth  our  while  to  examine  the  mat- 
ter with  some  closeness. 

There  is  no  dispute  in  this  case  about  the  economy  to 
be  effected  by  Mr.  Hoover's  policy  of  forced  development 
and  unit-plant  additions.  The  financial  argimient  against 
it  is  thpt.  while  increasing  profits,  it  decreases  ore-re- 
serves, and  tends  to  keep  them  at  about  a  three  years' 
limit.  The  investor  looks  upon  ore-reserves  as  the  secur- 
ity for  his  investment,  and  feels  that  he  has  little  enough 
of  that  if  he  allows  tw.o-fifths  of  his  capital  (Mr.  Curie's 
ratio)  to  stand  witliout  that  security.  In  other  words, 
under  normal  conditions  of  bottom  development  he  asks 
that  for  every  $ioo  of  stock  valuation  there  should  be 
$60  of  actual  profit  in  reserve  ;  then,  if  the  mine  be  paying 


i'>r, 


I  llli  1:CU.\(>MUS  Ol-  MIMXC 


lo  per  CL-iit  on  that  valiiatinii,  there  wnuKl  be  six  year>' 
dividends  assured  in  the  reserves. 

The  addition  of  further  treatment  units  may,  through 
tile  increment  of  protits.  increase  the  n.t  value  of  the  re- 
serves by  20  per  cent  and  the  annua'  dividends  I)\-  kk) 
per  cent.  The  increased  dividend  rate,  moreover,  has 
the  effect  of  raising  the  stock  valuation  as  well,  hv  per- 
hajis  lao  per  cent,  while  the  ori'-reserves,  in  point  of 
time,  are  diminished  by  half.  I  think  this  states  the  ar- 
gument fairly. 

For  the  original  investors,  those  who  bought  on  the 
$iO(5  basis,  nti  which  the  property  was  paying  its  10  per 
cent  dividend,  there  seems  to  be  no  question  that  the  sec- 
ondary ecpiipment  has  been  a  financial  gain,  rcgardleriS 
of  the  increased  stock  valuation,  and  it  is  iiard  to  see 
what  in  the  condition  of  the  mine  should  tempt  them  to 
sell  evei^.  at  the  enhanced  price  :  by  so  doing  they  would 
be  sacrificing  ;i  high-return  iiivesimeni.  and  one  that 
actually  exceetled  the  three-fifths  profit  in  ore-reserves, 
and  could  scarcely  hope  to  reinvest  their  increased  capital 
on  as  good  terms  as  that.  This  in  itself  would  tend  to 
strengthen  the  investment  view  of  mines,  and  weaken 
the  sjieculative. 

It  may  be  granted,  liowe\er,  that  some  Vv'ould  sell,  ami 
the  new  holders  would  have  a  10  per  cent  investment,  as 
tile  original  holders  had,  but  through  th-  sliort  life  of  the 
mine  they  might,  by  failure  of  subsequent  development, 
lose  part  of  their  capital.  The  question  is  whether  this 
ought  to  be  considered  in  deciding  on  the  secondary 
plant.  Should  the  present  stockholders  l)e  sacrificed  in 
pocket  because  of  some  possible  people  who  may  buy  the 
shares  later? 

Stated  in  this  way,  the  (picstion  implies  its  answer,  and 
I  can  see  no  reason  why  citlicr  tlie  management  or  the 
directory,  who  ;ire  expressly  chosen  bv  the  present  stock- 
holders  to   look    after    their    interests,    should    have    any 


EQ[-fr.}fl:XT  .IXD  ORI:-Ri;Si:Rr!:S       287 


(loiihts  in  tlio  mattiT.  We  may  all  Ik-  snrry  f(ir  excitable 
and  short-si>,rhti-il  investors,  and  Innk  forward  to  the  time 
when  a  clearer  view  of  what  constitutes  vahie  in  a  mine 
will  ohtain— may  even  exert  ourselves,  a.  Mr.  I'urle  so 
successfully  has  done,  to  brinp  the  tii  le  nearer  ;  hut  this 
is  entirely  irrespective  of  present  pohc, .  In  short,  it 
seems  to  me  ah.surd  to  hesitate  about  li^ditiiif::  a  fire  in 
A's  stove  because  11  may  burn  his  fingers  at  it ;  rather  the 
clear-seeing  economist  should  argue  that  some  time  P. 
nuist  learn  all  about  fires,  and  the  sooner  he  is  scotched 
the  sooner  will  he  become  enlightened. 

Perhaps  Mr.  Curie  would  argue  the  hopelessness  of 
expecting  people  to  sell  a  share  yielding  an  annual  $jo  for 
$ioo,  even  though,  on  Mr.  Curie's  basis,  it  lacks  security. 
This  may  he  true,  but  ilocs  not  this  simply  indicate  that 
the  la\inan  does  not  accept  that  formula  of  chances.^ 
In  the  absence  of  the  geological  and  historical  data 
that  would  give  the  be.-t  evidence  obtainable  of  the  future 
of  the  mine.  or.  perlnps.  because  of  inability  to  under- 
stand them,  he  believes  he  can  have  no  safer  guide  than 
his  experience  in  other  investments,  and,  according  to 
what  that  b;is  been,  he  capitalizes  the  particular  profit. 
This  is  not  saying  that,  as  an  expression  of  averages.  Mr. 
Curie's  formula  is  not  sound;  we  are  considering  it  as 
applicable  to  particular  cases,  and  for  such,  statements 
of  averages  are  of  d.nibtfi.l  value— <ine  cannot  predicate 
a  man's  height  from  the  mean  of  the  human  race. 

In  conclusion,  may  I  be  allowed  to  point  out  that  the 
term  'insurance'  is  not  safel\  aijjilied  to  what  security  may 
be  obtained  from  large  ore-reserves,  as  distinct  from 
'econonnc'  ones.  Insurance  is  a  definite  securitv  for 
which  a  definite  premium  is  paid  ;  in  this  case,  the  secur- 
ity is  indeterminate  ami  the  i)remiuin  depends  upon  the 
increment  of  profit,  which  is  the  sum  actually  sacrificed 
for  the  security  by  insisting  upon  the  two-thirds  rule. 
This   varies  from  dollars  to  tlmnsands:  but.  whatever  it 


288 


Till-:  liCOXO.UICS  OF  MIMXa 


may  be,  it  is  an  unknown  quantity  unk^s  the  investor  is 
awake  to  the  function  of  'fixed  charges"  and  understands 
the  ■increment  of  profits.'  When  this  de.i^ree  of  knowl- 
c(l"-e  has  been  reached,  it  is  not  a  far  siej)  to  a  technical 
view  of  the  real  prospects  of  a  nnnc  as  disunct  troni  the 
average  view,  and  knowledge  on  this  point  removes  the 
need  for  the  use  of  the  two-thirds  rule. 

What  1  liave  wished  \.  licularly  to  make  clear  is  that 
the  two-thirds  rule  with  its  conse(iuences  does  not  tend 
to  a  ratii'ual  treatment  of  mining  investments:  that  it  does 
not  of  necessity  make  for  the  less  specu'ative  view  of  the 
industry;  that  it  does  not  even  invite  the  best  class  of 
investors,  those  who  will  try  to  understand  the  needs  of 
the  business.  R    Gii.MAN  Brown. 

Bodie.  Cal.,  November  q.  lOO-i. 


GOLD    DREDGING    AT    OROVILLE 

i!v  Howard  D.  Smiih  and  Elwyn  W.  Stebbins. 

(  nect'nil)cr    y.     i  gM4. ) 

TIic  growth  of  the  j;olcl-drc'djj;injx  industry  of  Califor- 
nia has  j,dvL'n  it  a  Icadinj^  place  among  the  mining  activi- 
ties of  the  State,  and  there  is  every  indication  of  a  further 
increase  in  its  importance.  The  most  extensive  operations 
have  been  carried  on  at  Oroville,  where,  of  the  28  bucket- 
line  dredges  so  far  constructed,  27  are  now  in  successful 
operation,  and  the  ground  upt)n  which  one  dredge  failed 
to  pay  profits  is  at  present  worked  with  good  results  by 
another  company.  Several  dreilges  are  in  process  of 
construction,  and  active  prospecting  is  increasing  the 
area  of  proved  and  profitabl<'  dredging  ground. 

The  character  of  the  ground  at  Oroville  is  peculiarly 
favorable  to  dredge  operations.  The  false  bed-rock  is 
comparatively  flat  and  quite  soft,  being  merely  a  bed  of 
volcanic  tuff  overlying  unprofitable  gravel.  Few  boulders 
weighing  over  500  lb.  are  encountered.  The  gravel  being 
rarely  compacted,  there  is  no  need  for  blasting;  in  the 
present  river  channel  and  adjacent  thereto  the  gravel  is 
loose  and  easily  dredged.  On  some  high  ground,  where 
the  deposit  antedates  that  found  nearer  the  river,  it  has 
been  found  advisable  to  blast  the  hank.  At  the  expense 
of  a  decreased  yardage,  the  hard  gravel  can  still  be  dug 
without  blasting;  but  the  high  bank,  at  times  20  ft.  above 
the  highest  obtainable  pond-water-level,  makes  it  advis- 
able to  blast,  otherwise  the  undercut  bank  will  cave  in 
large  portions,  so  as  to  endanger  the  bucket-line  and  the 
dredge  itself.  For  blasting,  30  to  40  holes  per  acre  are 
drilled,  usually  only  to  water-level,  each  being  charged 
with  100  to  125  lb.  of  No.  2  dvnamite.  This  increases 
the  yardage  handled  daily,  as  well  as  obviates  danger 
from  the  caving  of  the  bank.      The  extra  expense  of  2.5 


'2W  I  III:  liCo:u>MlCS  Oi  MIMSG 

to  ,^c.  [iir  Ml.  [iri'\i.>  Id  lie  i;uu(J  prui-'ticc  uii'lcr  the  cir- 
cunistaiKcs. 

Tlic  j;ravL'l  is  of  a  dv-inli  siiilctl  to  (lrcil};iii^,  licing  from 
20  to  6u  ft.,  with  a  LI  iii|)aiati\cly  even  Miriacc.  I'or  a 
gravel  deposit,  the  ^mM  is  evenly  (lislriliuud,  ran!;ing, 
in  large  tracts,  Inun  10  to  33e.  per  yd.  The  wlmle  Oro- 
villc  tlistrict  probably  averages  about  idc.  per  _\  1.  The 
gold  is  all  tine,  screens  with  3/iS-iii.  luile-'  being  u.-^ed. 
Winters  are  mild,  and  im  difficulties  from  freezing  are  eii- 
cnuntereil.  Water  is  conveyed  by  an  excellent  ditch 
system  to  all  jiarts  nf  the  district,  the  expense  averaging 
about  $IJ5  per  ininith  per  <lredge.  L'nlimiteil  electric 
power  is  obtainable  at  1.5c.  per  kw.  hour. 

An  excellent  class  of  labor  can  be  had  a.  the  following 
wages : 

CKi;w  lok  oNi-.  i)i<i;i)GK. 

I    Foreman  at  $5.00  i)er  day ?5-00 

3  Winchnun         "     3.00       "        ().oo 

3  Oilers  "     J.  50       "        7. 50 

1  Biack-niith        '■     3.50       "        .V.^o 

;    Helper  "     2.},o       "        J.  50 

2  Chinamen  "     1 .75       "        i-^o 

Total $3 1  •  00 

1:'  addition  there  is  a  superintendent,  whose  time  is 
generally  distributed  anniig  several  dredges.  The  winch- 
men  and  oilers  work  S-linur  shifts,  wiiile  the  blacksmith 
and  heljier  woik  10  hours.  The  Chinamen  clear  the 
ground  of  brush  anil  trees,  'bury  dead  men"  and  do  gen- 
era! chores. 

Low  costs  are  attainable  largely  by  reason  of  conveni- 
ent communicaticin  with  San  b'rancisco,  and  the  presence 
of  well-equipped  machine-shops  on  the  spot. 

'Not  in  tlic  mortuary  -cii-c ;  in  c!re<l,^in(j:.  'dcail  nirn'arc 
.nncliors  of  wood  or  nutal  to  winch  mooring  caMcs  are  at- 
tached. 


<;()!. n  iu<i.in;iS{;  .it  oKoni.i.r. 


ll)! 


riif  Kriiund  is  pr- ispiTtf.!  hv  shafts  (ir  (Irill-linK-,  sunk 
to  bed-rock,  tlic  gravel  tlun  ftum  iiciiiL;  nuknl  nr  iiaiincd. 
''oside  ijivins  a  sample  of  tlic  ^'ravi'I,  pnxpn-t  holes 
should  yield  important  data,  as  to  tlie  distriliutimi  nf  the 
fjnld,  tlu'  eharaeter  (.)f  the  <lei)iisit  and  thr  nature  of  the 
lied-rock. 

'I'he  gravel  fmm  succev>ivc  leiij^nhs  of  a  hole  i>  treated 
seiiarately,  and  the  res])eetive  aini.unts  of  ,>;ol(l  estimated. 
Such  estimates  are  cheeked  uitii  the  \\eii;ht  of  the  f.;iiid 
recovered  from  the  entire  liorin.LT.  With  iiraetiee  this 
otimation  l)eeomes  fairly  accurate.  Shafts  are  preferred 
where  it  is  possible  to  sink  them,  as  they  ^ive  more  com- 
plete and  accur.ite  information  ;  hut  if  water  is  i)resent  in 
any  (|nantity,  they  become  tix)  exijensive,  and  drillini,^ 
must  be  resorted  to.  Owinj;  to  the  avadabilily  of  Chiiie-e 
labor,  shafts  arc  cheaper  to  sink  in  dry  jj^round  than  drill- 
holes. 

About  one  hole  per  5  or  10  acres  will  serve  to  sample 
a  larj,'-c  tract;  but  jirospect  holes  are  put  down  much  more 
frequently  in  the  immediate  vicinity  of  the  dr-d,Lre.  both 
before  construction  and  duritij.^  operation.  If  care  is  not 
exercised  in  prospecting;  with  drillings;  machines,  the 
sample  may  easily  prove  misleadiiij,'-.  Errors  frecjuently 
occur  fn.im  the  s(|Ueezinj;-  of  material  into  the  bottom  of 
the  casinij,  thus  sivinp;-  a  iarL;er  sample  than  is  called  for 
by  the  size  of  the  lu)le.  Sliminp  and  consequent  loss  of 
f,'old  will  sometimes  result  when  too  lon|j^  a  period  of 
chnrninq-  transpires  before  pumpint;  the  hole.  The  casint; 
should  be  kejit  driven  bekjw  the  point  of  drillinsj  when- 
ever possible.  The  practice  is  to  drill  and  pump  the  hole 
in  i-ft.  sections,  the  material  from  each  foot  bein.s,'  panned 
separately.  Where  preat  care  is  required,  sections  of  only 
6  in.  are  driile'.  and  pumped  at  a  time.  Frcciuently  the 
whole  f(K)t  can  be  pumped  with  but  little  drillinj,'-.  The 
drill  crew  consists  of  one  man  in  charge,  one  sand-pump 
man,  one  drill-man,  one  fireman  anil  one  or  two  laborers. 


i':»j 


nil:  Li.U.\OMlCS  Oi  Ml.MSG 


'IIk'  iiuiii  in  cluirj^c  .-lumld  Ikivc  a  kiiowlcil^c  of  the  i)nn- 
riljk>  nf  .^aiiipliii);,  U<x  u[m.ii  In.-,  jucl^imtil  (UpLiuls  ihc 
valiK'  nt  tin.'  rc.Mili.s  i)l)taiiicil.  lie  u.-.uall>  il"<.'.>  llit.'  paniiini; 
limiMlt.  Where  cil  i^  used  mr  fuel,  <iiie  man  attends  lo 
licth  tlie  sand-puiuiiiiij;  and  lirinj;.  'Ihe  ei  »l  i>i  samiihng 
with  ehurn-drills.  under  favorable  circu!ii>taiiLes,  is  $J  to 
iiij.30,  with  $3.50  [)er  foot  as  a  iiiaxiinuin. 

(iold  dredges  are  sinnlar  in  general  tvpe  and  operati  )n  ; 
Init  details  of  design  are  of  great  iinporlance.  In  fact,  suc- 
cessful dredge-building  depends  upon  working  out  the 
details,  and  a  dredge  properly  built  for  one  locality,  with 
given  conditions,  may  i)e  totally  unlit  for  another.  If  a 
dredge  is  not  suitably  constructed  for  its  particular  work, 
the  cost  of  re[)airs  is  certain  to  be  kirge.  Ihe  importance 
of  this  consideration  is  shown  when  it  is  understood  that 
this  item  of  expense  ranges  fri.m  i)ne-((uarter  to  one-hall 
tile  total  cost  of  operation.  Several  types  have  been  tried, 
l)Ut  the  li!  ket-liiK  dredge  has  now  superseded  all  others. 
LUickets  with  a  capacity  of  3  cu.  it.  were  hrst  used;  later, 
dredges  were  built  with  5-ft.  buckets,  while  near  Folsoni 
a  7. 5-ft.  bucket  has  been  used  with  a  fair  mea-nre  of 
success,  and  a  new  dredge,  of  the  same  capacity,  irect- 
ing  the  faults  of  the  first,  is  now  in  process  of  construc- 
tion. Dredges  of  11  and  i2-ft.  bucket  capacity  are  used 
in  other  districts,  bu:  it  is  impossible  to  compare  results 
without  data  covering  a'l  tl'e  local  conditions.  Two  5-ft. 
bucket  dredges,  built  to  handle  grave!  to  a  depth  of  60  tt. 
below  the  water  level,  are  now  undergoing  the  severe  test 
of  actual  operation  on  the  Yuba  river. 

The  advantages  of  a  large  bucket  are  increased  yard- 
age with  practically  the  same  labor,  the  pcjssibility  of 
handling  i)igger  boulders,  a  less  than  proportional  in- 
crease of  power  and  general  expense,  and  probably  a  less 
than  proportional  increase  in  the  cost  of  repairs.  'Ihe 
clisadvantaues  are — a  greater  first  cost,  the  necessity  for 
special    facilities    for    handling    the    heavy    dredge-parts 


(,('/./'  /'A7  /'(,7,V(,  .//'  oh'orn.i.r. 


•j'.i;: 


'A  111  II  ni.ik;iiL  niiaiis  i  T  ixiKual^,  ami  llic  iin  n\i>i  >l  ilitVl- 
i-iilty  ''1  wa-lmi-  llu'  lar-i'  and  lu-lil)  irn^ular  aiUMun'. 
(if  iiialirial  dcIiviTi-d  l>\  llu-  Imcktls  Id  tlu'  scncti.  ll 
>.i'iiiis  prcLalik-  that  tin.-  7.3-lt..  and  i»)>sil)ly  larger,  luickc; 
will  ])ruw  i1k  iih-t  (lt'>iralik'  uiukr  ocnditidns  existing  at 
(  ii-nvilk'. 

(i,.ld  is  lost  in  siviTal  ways.  A  ciTla-n  amnuiit  ^''^'^ 
i.tT  in  till"  tailiiiL;  t'nmi  tlio  shiicis  ;  and.  il  the  .L;r;ivt.l  is 
net  ilinn.nL;lil\  ^s.i^luiK  tlu-  ..•iiar>i.'  niali'rial  will  carry 
sonu"  np  till'  >lackir.  Sonic  is  left  <in  the  lud-nx-k.  ihouj.;!! 
this  amonnt  shcnld  be  small.  .\  slii^ht  kiss  dcciirs  fnmi 
tlu-  inatmal  which  drains  from  the  l.uckds  into  the  well 
(hiring;  their  journey  from  the  hank  to  the  iipjicr  tuin 
hlers.  i-'.xhanslive  tests  of  the  tahle-tailin-,'  have  hi  en 
niaile.  sliowuii:  a  \er\  small  kis>,  in  no  ca-e  as  much  as 
20.  per  \d.  With  .uoo(l  management  it  is  proh.ahle  that 
an  extraction  of  ahont  (p  per  cent  i>  ohtained.  Both 
cocoa-niattiii},'  .nul  anj^le-iron  rittles  have  jirovcil  excellent 
devices,  most  of  the  ^(M  heinj^  caught  directly  under  the 
screens. 

While  it  is  not  advisable  here  to  f^o  into  the  subject  of 
dredge-building,  it  is  well  to  mention  one  or  two  points. 
The  bucketdine  and  tumblers  are  subject  to  enormous 
strain  and  we.ar;  their  maintenance  constitutes  the  larj;er 
part  of  the  repairs.  .\iiy  improvements  which  increase 
•he  strenj^tli  and  life  of  the  various  wearini,'  parts,  witii- 
out  excessive  increa.-^e  in  co.st.  are  sure  to  be  welcomed. 
The  operators  have  been  constantly  iir,c;in,i,'-  manufactur- 
ers to  make  stronger  machines,  so  that  the  expense  in  lost 
time  and  in  repairs  will  be  diminished.  The  tendency 
toward  increased  strength,  power  and  capacity  is  still  in 
evidence.  The  7.5-tt.  machine,  in  prtx-ess  of  building  at 
F-'olsom,  has  bucket-pins  of  6-in.  diani.,  and  other  parts 
in  proportion.  .\  capacity  of  110,000  yd.  per  month  is 
expected.  There  is  a  valuable  device  for  increasing  the 
pitch  of  the  tumbler  faces  to  correspond  with  increased 


•2\n 


THE  I^CU.\UMICS  Ol-  MIMXG 


pitili  ut  llii-  liiKkcl-iliaiii  links,  uli'cli  results  linm  the 
ui-armg  (jf  the  \n\\>.  I  he  rcvulvnig  .screen  is  <k>irahlc 
ft»r  clayey,  stiiks  f;ra\el.  a>  it  luljis  disintej;rati>iii  more 
than  the  tlat  sireeii ;  where  j;n.iiiul  is  not  stieky,  however, 
the  Hat  >ereen  i>  ]ire!\'ral)le,  .siiue  it  co>ts  less,  is  easier  to 
rej)air  and  reiuw,  ami  ii>e>  U»  power.  Ii  i~  iinportaiu 
that  the  power  whie'.i  drives  the  hiicket-hiie  and  that 
which  raises  the  ladder  should  ctnne  irom  ditVereiit  mo- 
tors. There  is  thus  reserve  i)ower  in  ca>e  tlu  hank  caves, 
so  as  to  cover  the  ladiler  and  buckets.  \\  lun  dreil.i;ini; 
an  overliurdeii  ol'  harreii  >.>il,  si'ine  convkiiunt  method  of 
disposing'  <>i  it,  without  pa»in^'  it  o\er  the  tables  and 
fouling'  the  litiles,  is  desirahle.  I'or  tlii^,  and  other  pur- 
po.ses,  the  iiopper  should  he  made  to  diM-h.-irj^e  into  the 
well,  or  to  one  side  I'i  the  dredj;e,  when  doired. 

r.oth  intermittent  and  c'lose-coniiected  hucket-lines  are 
in  use,  hut  the  close-connected  type,  as  a  rule,  linds  more 
favor  amonj;  ojK'rators.  It  is  claimed — and  it  is  undouht- 
edlv  true — that  the  intiTiiiittciil  line  can  lie  run  faster 
and  tliat  the  huckets  till  better;  but,  as  there  are  only  half 
as  mativ  buckets  tor  the  same  number  of  links,  the  (lred,t;- 
ing  capacity  is  less.  An  iiiteriiutlcnl  biickci-line  will  han- 
dle larger  boulders  than  a  close-connected  one,  and  it  is 
to  be  preferred  in  some  cases  for  this  rcaMHi. 

'l\)  hold  the  boat  against  the  liank  and  move  ahead, 
either  .spuds  or  a  head-line  are  u>ed.  I'.ach  method  has 
advantages  and  advocates.  .\  little  tinu-  is  lo.-,i  in  walking 
ahead  with  spuds,  but  the  labor  of  l)ur_\ing  'tlead  men' 
for  the  head-line  ;ind  moving  the  latter  by  hand  along  a 
high  bank  is  obviated  ;  w  ider  cuts  can  be  dug,  hut  they 
are  ordinarily  of  no  particular  advantage.  Spuds  hold 
the  dredge  steadily  against  the  bank  .-iiid  obviate  the  roll- 
ing and  pitching,  which  are  a  disadv.antage  when  the 
head-line  is  u.-^ed.  It  costs  more  to  equip  a  dredge  with 
.s]iuds,  but  they  ;ire  generally  preferred  in  (  )rovillc  when 
dredLMUir  in   imnds.     When   working   in   swiftlv   running 


uuin  DKi.ncisc  at  oix'^rii.i.r. 


•J'.C) 


u.itrr,  a  ilml.^i-  nihiiJiml  uilli  l"illi  ln-.nMiia-  and  ^jiiuts 
wunM  he  <li'>ir,ililc. 

<  If  mining;  costs  in  ^HtKTal,  ami  of  (lrf(!f,'iiii,'  costs  in 
particular,  it  may  he  said  that  har.'  ti^,n?ri's,  withmit  de- 
tails (if  the  items  considered  and  "f  tiie  I'lcai  ennditions, 
convey  no  detiiiite  infornialion  and  are  iiractieally  value- 
less. By  a  little  iiookkeepiiit,'  dred;,Miii:  costs  may  he  made 
as  desired,  if  the  fij^nires  iiuluded  all  expenses  iiieurreil 
during  the  vear,  and  an  anmniit  for  the  dejjreeiation  of 
the  dredj^e.  a  inueii  niore  satisfaetory  hasis  for  coinpari- 
>.  ill  u-i'Uld  he  availahle.  Amortisation  oi  the  price  of  the 
t^'mund  ni.inife>tly  varies  with  each  case  considered,  and 
comparisons  are  useless.  Owiii^'  to  tiie  slack  metluMls  of 
measurement  fre(|nently  employed,  the  yardapc  quoted 
may  easily  vary  20  ])er  cent. 

The  following;  talile  of  co>ts  applies  to  a  3-5-ft-  close- 
connected,  hncket-line  dredij;c  workini;  in  the  hip;li-\vater 
eh;innel  "i  tlie  heatiii  1  river,  or  adjacent  thereto; 

-C.i^t    I'tT   CnTiic    \at'l — 

Percent'  ij 

I^inlc        -ik'e  nf  ■«  c 

Measure-    time  in  ,                                      Kep.iii                               ^  «; 

ment.  .1..     .ipera-  a"''  ^"I"      '.i'.i<-r.nl            (-  :? 

1903.       yd.    dug.        ti.m.  Lah'-r.        Pumt.          plies.       Kxpense.               u; 

Dec...  3S.0O0     68  ;8     $.<mS2     $.0221     $.oi,^o     $.0.^08     $.ti.v 
J.in....  37.000     67.61        .o.?o(:       .017.3       -0276         0023         077K 


..  37.000 

Feb...   .37.H00  86.16  .0276 

Mar..40.i(X)  65.88  .0250 

.Xpr'.  .  24.'()8o  42.68  .0.302 

Mav..   X'i-S72  74.33  0.^2 

June..    44.878  «7.76  ■02.U 

July..    .3,^..S20  72+4  -031.^ 

AuR..    49.340  84.80  .023,q 

Sept..   34.226  88.70  .0,^05 

Oct.'.  .  36.000  88.fvS  .0207 

Kov..    38.000  88.41  .0270 

Dec...   38.:;oo  W).73  -O-'^.^i 


.oiog 
.0181 
.0170 

.02.^8 
0173 

.0106 
0131 

.OKK) 
.  0220 
.0100 
0175 

oi8<) 


.0114 

.0038 
.0414 
■  0370 
.0230 
.  0280 

.033.S 
.0285 

.0207 

.  0433 
.oaS7 

.0241 


.0062 
.0028 
•  003.=; 
.0010 
.0022 
.0018 
.0010 

.00.?2 

.03  to 
.0026 
.0017 

.0075 


06.;  I 
.0.107 
.  looi 

.  00 1'' 
.0<Vi8 
.oSo'T 
07 1 1 
.0812 
.  10^2 
.0928 
.0.^64 

.O70<i 


'   llnod 


Grave!   30  to  45   ft.  deep  is  considered  easy  di.STRin.Lr 
l)v  Oroville  operators.     I'ndcr  the  head  of  iahor'  are  in- 


■2'm; 


I IIL  hxU.\OMlCS  Ui  MIMXC, 


(.'liuli.'d  ihc  MuxriiUiniiviU's  salary  ami  such  work  on  re- 
pairs as  could  i)c  made  \\idK)iii  the  aid  of  the  local  cusitun 
iiiachiuc-sliop.  I'tir  Ucccnibcr,  the  tirst  nionlh  nt  opeia- 
1'.'  u.  the  custs  are  increased  under  ilie  head  dt  'labor.'  i)y 
sujji.rinteiidein's  salars  prior  tn  start  of  actual  dij;|;iiii;  ; 
and  luider  head  of  'j^encral  expense,'  by  all  the  ort,''ainza- 
tiiiii  (.xpen.-cs  of  the  company,  the  taxes  on  lantl  and  the 
nistirance  for  one  _\ear.  In  April  hiL;li  water  lorceil  an 
entire  slmt-dow n,  thus  accnuntin.i^  for  the  small  yardat;e. 
"I'ower'  is  nicreaseil  b_\  reason  of  the  pumping  oi  water 
from  the  river  tw  the  dredge-pond  ;  it  ha>  since  been  found 
advisable  to  obtain  water  from  a  ditch  at  about  $75  per 
month.  (  'ne  new  stacker-liclt  was  boui;lu  diu-iiij;  the  \e.ir 
and  a  4odi.  p.  innt.;r  f.ir  the  pump>.  to  repla  e  one  of 
,^5  h.  p.  which  pn.ned  !nade([uate.  While  the  bucket- 
line  ke[)t  in  ^ood  conditinn.  there  was  no  j;eneral  replace- 
ment of  parts,  the  bucket-backs  beini^  still  in  use  in 
<  )ctober,  1904-  Stacker-bell  >.o.  3  u;is  purchased  in 
January,  i()04.  and  is  now  about  worn  out  with  8 
months'  use,  altliou.L;b  .guaranteed  for  one  \car.  This, 
with  the  expense  of  an  entire  new  bucket-line  stacker-belt 
recently  purcba^ed.  and  other  jiarts.  has  kejjt  the  costs  for 
I«j04  soniewhat  above  fij;ures  for  11/J3,  altliouj^di  an  in- 
creased yardat^e  averatjint,^  over  40.00(1  cu.  \(1.  jier  month 
has  lieen  ilui;'.  I  he  table  inchides  .ill  expen>e  incurred 
ti'r  whate\er  reason,  but  does  not  include  interest  nor  a 
Sinn  lur  amortization  of  the  capital  invested  in  land  and 
dredi^e. 

Above  is  a  summary  of  tiie  opertitim;  expense  of  :i  5-ft. 
intermittent  bucket-dredfjje  for  the  calendar  )ear  1903. 
This  dredi^e  C(..-.t  ^43,000,  which  is  much  lower  than  that 
of  the  better  class  of  dred.ms  ikjw  lieiii^  iiislallid.  .Most 
of  the  ground  was  fairly  easy  dii;^in},^  but  little  ti,i;ht 
gravel  beint,'  encoimlert-d.  I'ropdrtion  of  time  in  opera- 
tion. f)<).4:  b;mk  me.isurement.  474.O10  cu.  yd.  The  aver- 
age cost  was  :is  folldws:  (  )]x'r;itive  1,'ibor.   1.S5C,.  jiower. 


(/n/./)  /'A7:7'(;/.\(/  .//•  Oh'Oi'lLLi: 


JUT 


1.15c.;    rcjiairs    ami    .NUi)i)lics.    ,5.40c.;    j^icncral    expenses, 
1.J5C.;  total,  7.71c.  per  c.i.  yd. 

'Operative  labor'  includes  superintendent's  salary  per 
cubic  yard;  'rejiairs  and  supplies'  includes  the  labor  of 
repairs,  as  well  as  the  materials;  'general  expense'  covers 
i;eiural  exjiense  at  Oroville  and  at  San  Francisco,  taxes, 
insurance,  and  bullion  charges,  beside  tlie  expenses  of 
prospect ini,'.  To  the  above  should  be  added  interest  on 
the  inonev  invested,  includint;-  the  dredging;  plant  and 
land,  which  ni.ay  be  as.^umed  as  ai)proxiniateIy  0.75c.  per 
yd.,  and  anout  $4,500  for  yearly  depreciation  of  the 
dredge,  sav  ic.  per  yd.  This  brings  the  total  expense 
close  to  ().5c.  per  yd.  Out  of  the  jjrofits  there  .still  has  to 
be  written  off  another  amount  to  cover  loss  in  the  value  of 
the  land  dredged. 

The  following  figures  for  the  month  of  September. 
1904,  were  made  by  a  new  5-ft.,  close-connected,  bucket- 
line  dredge,  digging  on  a  spuil  in  soft  ground  40  ft.  dee]), 
tnider  ver\  favorable  ( iroville  conditions:  'l\ital  excava- 
tion, 96.1  I-'  cu.  yd.  'idle  cost  of  l.ibnr  was  0.957c.; 
power,  o.()()i)c.;  supplies,  o.<;35c. :  sundry.  0.4300c.;  taxes 
and  insurance  proportion  for  ttu-  month,  0.1075c.;  total. 
.V4JiS5c.  jier  cu.  vd.  There  was  no  charge  for  mainte- 
nance ancl  repairs  during  the  month. 

All  repairing  necessary  wa>  done  by  the  regular  crew, 
no  shut-down  for  that  purpose  of  any  moment  taking 
jd.ice,  thus  accounting  for  the  large  yardage  and  the  in- 
sigiiitlcant  expense  for  repairs.  ( ^n  the  other  hand,  costs 
for  one  company  have  run  for  several  months  togetlier 
over  20c.  per  cu.  yd.,  which  shows  the  amount  of  varia- 
tion encountered,  and  the  erroneous  imiiression  given  by 
costs  which  cover  but  a  short  jierind  of  time. 

Figures  recently  (|Uoted.'  with  no  details  as  to  iteni'^ 
included,  give  yearly  averages  of  from  4.92  to  7.47c.  per 
cu.  yd.,  the  gener.d  average  fr.r  a  luimbcr  of  years  bcitig 


'Tlii.'-  TouKN.M..  OitolKT  (>.  1004,  p.  541. 


L".I8 


illE  JiCU.XUMiCS  Ul-  AJlMXi, 


6c.  These  figures  may  contain  ;>M  legitimate  charges 
against  operating  costs,  notwithstanunig  the  fact  that  the 
intermittent  bucket-hne  type  of  dredge  is  u>ed,  as  this 
particular  coni])any  works  under  very  favorable  condi- 
tiims,  namely,  dredging  alni(i>t  exclusively  in  the  present 
liver  chaiiiK-1,  thereby  saving  the  ciist  of  water  and  en- 
countering only  loo>e  and  easily  dug  gravel,  and  having  a 
well-equipi)ed  machine-simp  devoted  to  tlredge-repairs 
and  operating  hve  dredges  in  the  same  vicinity. 

The  manager  nf  this  company,  in  common  with  others 
equally  well  infnrnied,  h.ilds  that  the  average  of  operating 
costs  fur  ihe  (  )ni\iile  district  is  certainly  not  less  than  "c 
per  cu.  yd.  at  this  time. 

It  is  evident  ihat  with  more  than  one  dredge,  items  such 
as  superintentlence.  repairs,  (jffice  expense,  etc.,  may  be 
mati -ially  reduced.  What  the  future  may  Imld  forth  to 
operators  iif  large  and  improved  dredges  is  hazardous  to 
say,  but  predictions  are  freely  made  of  a  cost  of  from  4 
to  5c.  per  yd.  under  f.avorable  circtnnstances. 

I'onditions  favorable  to  dredging  at  a  low  cost  must 
apprr.ximate  those  found  comnmuly  at  Oroville,  namely, 
a  soft  and  nut  uneven  bedrock,  few  boulders  over  500  lb. 
in  weight,  gravel  banks  from  20  to  60  ft.  deep  and  not 
sufticieiuly  indurated  to  re(|uire  blasting,  a  plentiful  supply 
of  water,  cheap  power,  machine-^hdp  facilities,  nearness 
to  supplies  and  means  of  transportation,  mild  winters  and 
mtelligent  labor  at  reasonalde  wages. 

Gold  cnnrcntrnted  on  a  h;ird.  rdugh  bedrock  cannot  be 
dredged.  \"ery  large  boulders  have  to  be  left  with  con- 
siderable gravel  surroun<ling  them,  and,  if  many  are  en- 
cinmtered,  dredging  becomes  itnpossible.  In  departing 
from  the  f.'vor;d>le  conditions  stated  above,  the  expense 
and  difficulty  of  operation  increases,  lucessitating  a  higher 
grade  of  ground  for  pn'iit. 

The  conditions  bearing  on  the  cust  "i  operation  are  such 
that  eac'n  tract  nf  gmund  Ijecomo  a  prdblem  in  itself,  and 


aOI.u  I>RliD(iI.\G  AT  OROniJ.T 


L"J1> 


any  attempt  to  use  the  costs  obtained  under  one  set  of 
conditions,  to  predict  those  which  would  hold  under 
otliers.  without  a  thorough  knowledge  of  the  various 
elements  which  enter  the  problem,  will  lead  to  large  dis- 
crepancies between  the  results  predicted  and  those  ac- 
tually obtained,  with  a  possible  consequent  failure  of  the 
enterprise.  Much  remains  to  be  learned  abnut  gold 
dredging;  but,  in  the  future,  as  well  as  in  the  past, 
progress  will  no  doubt  result  fmni  the  helpful  professional 
spirit  prevalent  in  the  Oroville  district,  tiood  dredging 
conditions  are  not  generally  found  with  gravel  deposits; 
but  no  form  of  minnig  gives  r  re  certain  results,  pro- 
vided the  average  content  of  the  deposit  and  the  ojjeraiing 
facilities  have  been  found  favorable  by  competent  investi- 
gators, and  a  suitable  dredge  be  installed. 


THE    BASIS    OF    VALUE 

(Editorial,   Ueccmbtr    15,   iyu4.) 

The  recent  break  in  the  share  (luotations  of  the  Amal- 
gamated Copper  Cumpany  ami  the  Greene  Consolidated 
L'opper  Company  tloiihiless  illustrates  several  of  the  va 
garies  of  human  nature  and  some  of  the  eeeentrieities  of 
speculation  ;  but  unlike  as  these  two  undertakinj^s  un- 
doubtedly are  in  many  respects,  they  bear  one  resemblance 
in  the  lack  of  proper  information  given  to  sharehold- 
ers. It  is  manifest  that  when  either  the  financial  condi- 
tions or  the  metal  markets  aii'ect  adversely  the  ([uoted 
value  of  mining  shares,  those  will  sulVer  most  winch  are 
rendered  vulnerable  by  alisence  of  reliable  information. 
The  ilaily  press  may  very  ,.riiperl\  sneer  at  Mr.  '1.  \\  . 
La'vsi>n  and  attempt  to  ileu\  him  his  harti-bmight 
notoriety  bv  refirring  to  him  as  a  ISoston  operator";  but 
the  fact  is  that  luither  he  nor  any  other  adventurer  could 
depress  a  security  such  as  Amalgamated  if  it  published 
proper  reports  and  balance  sheets.  As  it  is,  the  hel[)less 
speculator  knows  nothing  of  the  assets  or  of  the  intrinsic 
value  of  the  property  represmted  by  his  share  certiticates ; 
it  may  be  a  South  Sea  bubble  of  iridescent  air,  and  he 
might  as  \vi  '1  throw  his  money  on  the  roulette  table.  W'e 
venture  to  s.iy,  however,  that  if  a  proper  accounting  of 
the  business  were  given,  accompanied  by  reports  on  the 
pin  sical  condition  of  the  mines  by  the  techn.ical  chiefs, 
such  men  as  Mr.  Benjamin  B.  Thayer  or  Mr  L'harles  W. 
Goodale,  the  value  of  Amalg;miated  shares  would  rest  on 
a  solid  basis  of  fact.  Similarly,  in  regard  to  Greene  Con- 
solidated, splendid,  mine  as  it  is,  nothing  definite  or  sat- 
isfactory is  given  in  the  reports  issued  to  shareholders. 
Vague  and  flamboyant  statements  are  issued  by  the  presi- 
dent and  a  handsome  production  is  undoubtedly  being 
mad>.,  but  none  of  the  usual  ;ind  proprr  estimates 
of    ore-reserves    are    given    to    the     shareholders — .md 


THE  BASIS  OP  r.U.UF. 


•.w\ 


uitliont  those,  tlie  rate  ')t  dividend,  cost  ot  cop- 
per, and  so  forth,  are  illusive.  Here  af::;ain.  we  vcn- 
Uire  to  sav  that  it  smh  menilicrs  of  the  manasenHut 
as  Mr.  .\rthnr  S.  Dwi-ht  or  Mr.  W.  P,.  Dcvcrenx  were 
to  make  a  rejjort  on  the  ore-reserves  and  future  prospects, 
there  would  be  tjiven  a  stability  to  the  investment  in  this 
copper  mine  such  as  it  can  never  possess  under  existing 
circumstances.  Whether  people  buy  as  pamblcrs  or  as 
investors,  sooner  or  later  they  nuist  face  the  facts,  and 
the  fundamental  fact  in  a  mining  enterprise  is  the  known 
quantity  of  ore  in  the  mine. 


EQUIPMENT    AND    ORE-RESERVES 

The   Lditor: 

SiK — 1  have  \:w\\  greatly  interested  in  foll(nving  the 
(hscnssion  on  '(Jre-Reservo,'  tci.:,H'llKr  with  vuur  impar- 
tial treatment  of  the  snbjeel.  It  is  an  excellent  illustra- 
tion of  the  tiimiy  fruitlulness  of  devt-lnping  a  suhject  in 
this  way.  Indeed,  1  know  of  no  greater  service  that  the 
leading  mining  journal  of  the  world  can  perform  than 
to  thrc-h  out  such  pu/zling  (juestions  by  public  discussion. 
Here  is  something  [iraclical.  The  faulting  of  the  strata 
of  the  -lock  market  may  confuse  many  a  wise  and  honest 
director  or  sui)crintendcnt,  who  wishes  to  follow  l!;e 
pay-streak  of  honesty,  and  the  vein  of  business. 

I'irstly,  I  would  cordially  agree  with  you  in  the  wis- 
dom of  dealing  frankly  with  the  public.  If  ore-reserves 
arc  to  be  hoarded,  let  tlv  knowledge  of  the  fact  of  re- 
serves be  as  open  as  is  the  e.xistencc  of  the  mine  itself. 
Indeed,  tin-re  is  no  more  sign.al  mark  of  ethical  progress. 
in  civilization  at  large,  and  in  the  cor'rol  cjf  business  in 
particular,  than  the  growing  demand  by  the  people  for  a 
free,  open  statement  of  the  respective  facts.  The  people 
may  not  alwa_\  s  get  this,  but  they  have  learned  tt)  ask  for 
it ;  and  in  this  I  presume  that  lox  popnli  is  lox  Dei. 

But  secondly,  assuming,  to  be  sjjecitic,  that  the  con- 
trasted views  of  Mr.  Hoover  and  Mr.  Curie  re[)resent  the 
opposite  opinions  of  the  speculator  and  of  the  investor 
respectively,  is  it  fair  to  formulate  the  questions  at  issue 
from  the  stand[)oint  of  either,  or.  for  that  matter,  from 
a  standpoint  intermediate  between  both  ?  That  is,  may 
there  not  be  other  and  more  powerful  considerations  of 
ijusiness,  to  the  demands  of  which  the  private  interests 
of  both  investor  and  speculator  must  conform?  It  may 
be  trie,  for  the  present — as  the  speculator  is  furnishing 
most  of  tlic  money  necessary  to  develop  mines — that  his 


P.nUIPMI-.XT  ASD   ORI-.-KRSPRVP.S      HO:? 

iim-rc'-ts  must  I'c  lon-ultid  ;  tlu>  may  hv  a  present  lui-i- 
nc'ss  necessity.  lUit  is  it  ptissihlc  to  educate  tlie  specu- 
lator to  the  more  rational  views  of  the  investor?  And  is 
it  possible,  in  turn,  u)  (piicken  the  investor  with  the  spec- 
ulator's practical  keenness  for  results?'  And  to  do  lidth 
so  that  business  jiractice  niav  attain  that  nu'tliod  of  mine 
nianaijement  which  is  best  for  all  Cducerni'd  in  the  Vavz 
run  ? 

Then,  thirdly,  what  will  best  serve  the  real  purpose  of 
capital  invested?  If  the  applicatidU  of  actuary  mathe- 
matics to  such  prMJiKnis  were  hi-hlv  developed,  it  would 
he  necessary  onlv  m  refer  ti>  a  manual  of  dividend  accu- 
mulation, anidrtization  nf  investment,  sinkin.y;  fur  1  reduc- 
tion, etc..  to  know  .at  once  what  arc  the  financi;il  forces 
that  are  competint,'  fi  .'  control  as  this  complex  of  interests 
seeks  its  natural  e(|uilibrium. 

Now  a  mine,  even  a  lar.t^e  one,  with  large,  well-defined 
veins  carrvini;  a  -generous  supply  of  ore,  even  this  is  not 
like  a  farm  wlii^li  may  sci  ""  indefinitely  producing  from 
tlie  same  'ground  year  afur  year.  .An  exhausted  mine 
is  sint])lv  an  empty,  worthless  hole  in  the  ground;  and 
this  may  be  the  destiny  of  all  mines.  This  view  would 
seem  to  argue  distinctly  for  the  speculator.  The  mine 
is  hound  to  be  exhausted  sooner  or  later;  working  it  is 
like  the  threshing  of  this  year's  wheat  crop-  let  it  be  done 
and  done  as  ([uickly  as  possible,  so  as  to  r-loase  the  capital 
for  employment  in  other  fields.  The  illustration  is  good; 
but  it  is  not  an  argutnent.  It  is  at  best  only  an  analogy 
which  can  be  applied  to  certain  mines,  namely,  those 
which  can  be  quickly  exhausted.  .As  for  the  other  class  of 
mines,  those  like  the  Treadwell.  the  Homestake,  or  better 
still,  some  imaginary  reef  or  mountain — as  the  gold  in 
the  ocean,  for  instance — which  .night  be  practically  inex- 
haustible, in  such  cases  would  not  the  policy  of  counting 
on  long  supplies  for  the  long  investor  be  the  better? 
This,  then,  is  the  suggestion  that  I  would  make,  and  I 


1-1 


au4 


JUL  LlU.\UM1lS  OI'  MIMXG 


ui.nIi  _\(iU  wi.ulil  M)  (HmUss  il.  Is  iiol  llic  inUTcst  of  the 
transient  .spcciilatur,  ri.]) resented  by  .Mr.  llt><)ver.  ju^ul'ied 
Ly  tlic  cniiditicMis  ot  snine  niii\es?  And,  on  the  other 
hand,  is  not  the  interest  "t  tiie  loii},'  investor,  represented 
by  Mr.  Curie,  ei[iially  well  jiistitied  by  the  conditions  of 
other  mines?  Do  not  both  views  represent  some  truth — 
but  only  as  applied  to  special  cases?  Will  it  not  be  uell 
to  continue  the  discussion  till  we  may  see  clearly  brou^dit 
out  the  particular  kind  of  mine  to  which  applies,  re- 
spectively, the  interest  ui  the  investor  and  of  the  specu- 

''^""•'  C.  S.  r.\L.MKR. 

New   York.  December  5.  1904. 


LEASING    AT    CRIPPLE    CREEK 

The   Ldiior: 

Sir— Mure  lias  Ikcii  a  c()n>i(kTaljlc  imprnvLinciU  lately 
in  the  (nitput  of  the  Cripple  Creek  district,  both  in  (iiian- 
tity  and  -nudity  of  (^re.     MmukaneiiUsly  there  has  been  a 
decided  extension  of  the  leaMn-  system  both  in  practice 
and  in  jiopnlar  favor.     Cndcnibtedly  a  portit.!i  of  the  un- 
proved  results  are  due  lo  the  success  of  many   leases— 
especially  on  Stralton's   Independence.     It  occurs  to  me 
that  a  discussion  of  the  merits  and  province  of  the  lessee 
as  compared  with  those  of  the  company's  miner  and  nnn- 
ing  en-meer  may  intere^t  a  pnrtion  of  the  minin.i:  public. 
Manv   suppose  that   the   reason   why   lessees  oitcn   do 
marked'lv  better  than   companies   is   that   they   k"-'    """■<-' 
work  out  of  their  men  and  do  a  good  deal  of  the  work 
themselves.     I'ndoubtedly  m  general  this  is  true,  but  the 
importance  of  this  point  is  much  less  than  many  imagine, 
and  there  is  no  reason  why  a  mine  superintendent  cannot 
make  his  men  work  just  as  hard  as  a  lease  superintendent 
can.     In  fact,  it  is  possible  fnr  a  mine  superintendent  to 
accomplish  just  as  gwd   results   for  his   company  as   a 
lessee  can  for  himself.     Many  leases  of  importance  m  the 
Cripple  Creek  district  are  managed  by  hired  superinten- 
dents, just  as  mining  cnmpanies  are.     In  mv  ,.pinion  the 
snperioritv  of  the  lessee  comes  from  the  fact  that  his  train- 
ing quahf.es  him  to  find  ore  and  mine  it  to  the  best  ad- 
vantage.    He  is  0i:en  aided  by  the  fact  that  he  has  n 
professional   record  to  make.      He  is   not    worried  abr    . 
costs  per  ton.     His  sole  object  is  to  make  money,  and  he 
makes  it  by  shipping  clean  ore. 

Nobodv  hears  of  leases  in  any  mines  except  those 
where  (i)  the  ore  is  a  concentrating  one,  or  (2)  the  find- 
ing of  the  ore  is  the  principal  part  of  the  work.  Tt  i^ 
cunous  to  note  how  little  there  is  in  mining  literature  on 


•It 

•  If 


;;(m; 


I  /ll:  ECO.\uM/lS  Ul-  MJ.\L\(i 


tlic  .siiljji.ct  of  nmiiii-  cuiKciur.-itini,'  ores.      V.v   concen- 
trating ure  I  mean  an  ..re  in  which  tlie  metal '.sou^Iit  is 
ii'>t    nminrmly   distributed    through    ilir    ni.i>s:    in    ..tliu 
uurds,  an  ore  cuiisisting  in  larye  part  ..1   unrtlikss  rock 
which  must  ni  sonic  uay  he  separated  from  tlie  vahiahle 
mineral.      Mo.st  .,f   the   uunv.   in   ilu-    Koekv    Mountain 
ref^ion  are  of  this  chanirter.     Tlie  han.llniK'  ''i  Mich  oa- 
bodies  afTords  a  much  .t,aeater  scope  for  intelligence  and 
Inisiness   judgment   than   ,1,-e.   the  extraction   of   a   hodv 
of  uniform  ore.     In  the  latter  case,  one's  efficiency  can  he 
nieasurert  in  cost  per  ton  of  ore  mined.      In  the' former, 
one's  efficiency  nm-t  he  measured  hv  the  o-t  ,,f  metals 
produced.      It  is  not  fair  even  to  ,„;,ke  a  comparison  of 
the   cost  of   concentrates:    in    the   case   of   lead   ores,    for 
example,   r>ne  ni.in    niav   take   a  50  per  cent  concentrate 
and  another  a  70  i.er  cent.     Obviouslv  in  a  concentrating 
proposition  the  main  efTort  is  to  get  rid  ,.f  the  worthless 
gaiigue    and    .save    the    Nahiahle    metal.       Whether    this 
gangue  can  hest  he  reniovr.l  in  the  process  01  mining   or 
in  a  concentrating  mill,  or  partlv  in  hoth,  is  often  a  ques- 
tion iiiK.n  the  solution  of  which  depends  the  success  of  a 
mining  venture. 

In  Cripple  Creek  the  ores  arc  almost  universallv  of  the 
nnxed  type.     They  will  ,„,t  uel.l  to  ordinary  metiiods  of 
water  concentration.  Alter  the  ore  is  hrr.ken  it  can  onlv 
be  separated  crudely  by  means  of  screening,  snppleniented 
by  hand-ptckmg:  but  the  cncentrating  can  be  be.ain  at 
the  moment    the  .irilling  be.:;ins   umlerground  l.-v  u.kin- 
care  to  brenk  nothing  except   what   will   pav      TIktc   i" 
plenty  of  room   for  skill  an.l  experience  in' determining 
such   ,iu,s,„„,  ;,s    the    following:    (.)    what    ground   to 
break  and  what  to  leave;  (j)    u  here  to  put  tlie  hoj^s  and 
how  much  powder  to  use  in  breaking  in  order  to  leave  the 
rock    m    the    best    con.lition    for    elTectivc    sortin-    (:,) 
whether  it  IS  best  to  sort  un.lerground,  or  on  the  Surface 
or  both;  (4)  whether  to  use  hand-drills  or  machines;  (5) 


/-/:./.s7.\(,  .;/    (  A7/77./-.   CKI  l:K  ;;(i7 

^^1';"  ai.ph.uu-.s  ,,,  u.r  n,  th.  >l,.q.r  .„   ua.iaTs.  .>,,rtn,.^- 
l.ililis,   pu-kiii','  liilts.   etc..   ftc.  ^ 

I.ich  of  tlu'.sc  (iik'stions  (if  liatKlIin-,'  tlir  <  t,-  ni  i\     in.! 
-I;h-.  vitally  afT.ct  tl.c  lessee's  i>nck.th.,.,k      lie  mu.t  .lo 
IM-    nnmnt;    snUIy    ui,l,    a    view    ,u    nukuiLT    profits,    for 
I'n.t.ts  Ik-  nntst  have  ..r  ,|„it.     A  ,ni.,c  n,ar.ai;er  n,av  .-o 
thrnn^.h  iIr.  motions  of  .nitiinj,.  i„  apparentlv  ^'o,,.l  mvIo 
II''  n.a\   have  nue  tnadimery,  jjood  p„mps,  elab., rate 're- 
ports,   aeciirate    cost-sluets— and    ,„,    pr.^Ci.        He    nriv 
"">u-  larjre  oreho.lies  at  s,„all  cost.      He  >nav  r.oint  with 
pn.le  to  the  very  ihinu^  thai  on,^hl  to  eo„.le,nn   hini  .is 
Ii-IHlessly  ineontpetent.     1  le  may  he  minin.t:  t"o  mneh  an-l 
nninnf:  ton  eheap.      In   savin-  at   the   s,,i^.ot   he  may  he 
losmf:^  at  the  htuii,'. 

The  les.see  rarely  enmniits  such  blunders  He  thinks 
solely  of  .Inllars  a„.l  cents.  He  tnakes  no  reports  and 
seldnn,  hntluTs  al.,:nt  indicator  cards,  lu.t  he  watches  h.s 
ore  like  a  hawk  ,n,d  ,„ines  it  ri.^dit.  He  i^mores  the  frills 
and  attacks  the  siil,stance  of  his  business. 

So  far  s,,  .^nnd.      I  hit  the  lessee's  linntations  are  also 
co.ispK-nons.     (  )rd,nar,ly  his  mterest  m  the  pn-perty  d(,es 
not  exten.l  bey„„d  the  hope  of  makinjr  some  money  out 
of  a  lunued  block  of  ^^round.     His  development  work  ,s 
apt  to  be  d,,ne  .L^rudoin^ly  and  with  little  attention  to  its 
sub.se.inent    utility.      In    mmes    that    have    been    partiallv 
<!evelnped  by  the  leasin-  svstem  it  often  happen.,  that  the 
entire   nnne    nuist   be   re-npened   on   more   comprehensive 
l.ncs   helore   it   can  be   w,,rked   out.      It   usuallv   happens 
also  that  the  owners  fall  back  at  last  upon  the  ;ervices  of 
li.red    nuana.cers    who.    while    havinj^   .some   .lualifications 
Ihat  the  lessees  lack,  .-.re  deficient  in  the  verv   important 
practical  virtues  that  the  lessees  possess. 
_    It  seems  to  me  that  the  lessee  fills  a  peculiar  province 
HI  the  ramm^  business  that  is  es.sentiallv  his  own-that 
of  fun.ishin-  the  hanl   comm,.n   sense  and  practical  en- 
tcri,nse   iuces<ary   to   exploit   doubtful   and   poorlv    man- 


308 


rill-.  ECOSOMICS  Ol-  MIMXC 


a>;iil  ii.iius.  Ill  li.i-.  ti'  l.iki.'  ili.iiu  I.'',  .iiui  111  t.ikiii;^  tliclll 
he  is  n.\sar(lf(l  liy  a  i.\riam  i)iri.i.iita^;f  ni  .successes.  IK- 
takes  cIk'-hcs  that  a  tlioroii^'iily  .(ii^ipctciit  mining  ciigi- 
lU'iT  iiiij^iit  III  it  1)1-  willins^  til  .iiivi.si' 

I  liorc  is  imicli  that  the  average  lessee  knows  whieli 
shniilil  he  e--Miiti,il  tn  the  >iK\ess  of  every  milling;:  operator, 
hut  uliieh  is  strai;i;el\  nej^leeted  hy  many.  I  iiere  are 
some  mine  managers  who  appear  to  forget  tl'at  tlieir  hnsi 
ness  is  >itiinii^,  ami  who  neglect  the  problem  of  handling 
the  ore  to  ^pelul  their  lime  mi  retineinents  wliuli  ni.iv  he 
of  iniportaiiee,  Imt  uIik-1i  "-iglit  to  he  K  tt  to  oilurs  i 
believe  it  to  l)e  rare  that  any  amount  of  leclinii-al  know  I 
edge  is  of  siitlhcient  value  to  cover  up  a  defn  leiicy  in  tin 
knowledge  of  plain,  straight  mining.  Wlun  the  lessee 
demonstrates  hy  hi>  snccess  that  such  deliciency  has  ex- 
isted elsewhere,  he  is  doing  the  husiness  and  the  profes- 
sion a  great,  luit   pirli;i])s  nnconsrious.  service. 


J.  R.  FrNi..\Y. 


Colorado  Springs,  Xovembcr  14,  1904, 


SECRECY   IN    MINING 

(Kihtorial,  December   ^9.   i904-> 

1  lie  Wf-t  Australian  Ldiiimissidii,  ciiiik  wcrcd  to  bold 
..II  iiiijUir\  iiitn  till'  ti.iM."o  arisinij  finm  tlv  maTiipulaMoii 
of  bliarcs  ill  ilu'  KmiUlir  l)n]i  LiacIs  at  Kalj^'norln.',  has 
()risi'iitL<l  it>  ii-port  to  till-  Slate  i,n)vrrim;_n..  It  is  ni.iiiiv 
imndi-d  : 

"(I)  Tliat  all  niiiK'S  sliall  liv  open  to  inspcctmi)  by 
sliarflii:)klcrs  at  convenient  hours.  (  j)  I'hat  the  Minister 
of  Minis  sliall  he  empowered  to  authorize  an  i  fticial  to 
take  samples  from  any  property,  iiisiiect  the  working,  and 
(J,)  i.'oiii]iel  tile  i'i'ni])anies  to  keep  assay  plan.s,  also  jilans 
of  till'  under;;ronii(l  \vorkin<;s  where  they  will  he  avail- 
.ihle  for  iiis[)eotinn  hy  shareholders.  (4)  It  is  further 
reeoninun  ud  that  tiiisrepresentatioi:  or  concealnieiit  of 
faets  shall  he  punishable  hy  itie  or  imprisonment,  and 
(5)  that  managers'  reports  shall  i>e  published  locally 
coincidently  with  tin  r  reacliin<,'  the  iuad  office.  Tiie 
C'onimission  says  that  the  enforcement  of  tiiese  recom- 
mendations will  put  an  end  to  secrecy  adopted  by  some 
mines." 

The  intention  of  tlicsc  recommendations,  in  so  far  as 
they  signify  the  lifting  of  secrecv  from  the  operations  of 
mining  companies,  is  well  enough.  Wrong-doing  grows 
in  the  dark;  the  opening  of  doors  and  the  admission  of 
light  will  do  much  to  check  the  rascality  from  which 
mining  investments  sufifer.  Admission  to  mines  sliould 
be  regulated  so  as  not  to  impede  operations,  and  it  should 
include  the  experts  engaged  by  shareholders,  as  well  as 
the  shareholders  themselves.  ,\  limit  as  to  the  number  of 
inspections  permitted  during  a  given  period  would  be  a 
reasonable  check  upon  a  practice  which  might  degenerate 
into  a  nuisance.  Tf  the  Minister  for  Mines  is  to  be  em- 
|)owered  to  send  an  official  to  inspect,  then  the  Minister 
himselt,  no  less  tiian  his  deputy,  must  on  no  account  be 


:{lo 


I  HE  LlOXOMICS  Ol-  MIMXG 


thf  i>.,.s,c,sor,  i.i.vcT,  ,„■  >dkT  <.l  ilK'  sliarcs  ..f  atu    mine 
in  the  region  uvcr  wliicli  he  lu.kLs  this  autlu.nty      \s,av- 
plans  and  maps  are  iKxx,^sary  to  all  iiniies.  whether  large 
or  small;   and   this    rccuinniendation    should   meet    with 
unquahhed    approval.      W,    presume    that,    in   order    to 
punish  misrepresentation  and  concealment   of  facts    the 
intention  to  defraud  would  have  to  be  proved;  this' is  a 
k'gal  matter,  the  settlement  of  which  is  unimportant    for 
If  secrecy  is  eliminated,  misrepresentation  will  be  unsuc- 
cessful.   The  publication  of  reports  locally,  as  well  as  in 
London.  ,s  reasonable;  it  will  work  no  hardship  on  the 
siiareholders   in    luirope   or  elsewhere,   and    it   will   be  a 
I'n.per   concession   to   Australian   shareholders.       If    the 
\\fstern  Australian  government  imposes  such  a  condi- 
tion, we  do  not  see  why  the  I-iiLdishman  should  object 
Ihis  also  will  serve  as  an  obstacle  to  tiie  manipulation  of 
the  local  stock  market,  by  encouraging  the  diffusion   of 
official  information  simultaneouslv  at  l«th  ends    the  head 
office  in  London  an,l  the  place  where  the  mine  is  situated 
Kverything  that  tends  to  give  shareholders  full  informa- 
tion, works  for  the  investment  aspect  of  mining;  changes 
in  tne  physical  condition  of  a  mine  are  frequent,  but  these 
account  for  only  (Mie-quarter  of  the  fluctuations  in  share. 
A  straishtforward  pnlicv  give,  security,  and  without  that 
a  mine  becomes  merely  the  sport  of  gamblers. 


MINE  VALUATION 

(Editorial,  January   19,   1905.) 

Un  another  page  vvc  reply  to  a  correspondent  in  Mex- 
ico, who  asks  for  an  explanation  of  the  use  of  annuity 
tables  in  the  appraisal  of  mine  sliares,  and  we  have  taken 
the  opijurtunity  to  publish  Inwood's  tables,  which  are 
used  by  investors  in  South  African  mines.  To  some  of 
our  readers,  it  will  seem  ajjsurd  to  apply  sucli  methods 
to  the  cheerful  gamble  of  a  mining  venture  ;  and  to  these 
same  readers,  the  vagaries  oi  gentlemen  from  Arizona 
and  prophets  from  Boston  are  fit  and  proper  adjuncts  to 
an  industry  the  importance  of  which  to  us,  on  the  other 
hand,  can  be  gauged  not  only  in  terms  of  money,  but 
also  by  the  education  and  character  of  the  profession 
which  tries  to  serve  it  faithfully,  despite  the  careless  dis- 
regard of  an  ignorant  public.  To  many  speculators,  the 
talk  of  amortization  of  capital,  return  of  investment,  life 
of  mine,  and  other  financial  terms  indicative  of  serious 
business,  is  only  an  irritation ;  and,  when  yon  speak  to 
them  of  the  necessity  of  a  mine  paying  back  the  market 
valuation,  plus  interest  on  the  investment,  they  grow 
weary.  But  it  does  not  need  a  long  lifetime  to  appreciate 
the  fact  that  mining  is  slowly  emerging  from  the  muddy 
shallows  of  spurious  finance  to  a  dignified  busmess ;  and, 
if  our  insistence  on  certain  fundamental  principles  can 
contrib"fe  to  that  end,  one  of  the  purposes  of  this  Jock- 
N.A'  .  '  le  fulfilled.  It  is  pitiful  to  notice  how  the  daily 
pre.  s  conmient  on  the  Montreal  &  Boston  impos- 

ture, appea.s  to  accept  a  low  standard  of  morality  as  in- 
herent in  mining  affairs,  without  so  much  as  a  side  glance 
at  disgraceful  messes  such  as  that  of  the  Shipbuilding 
Company,  and  other  industrial  undertakings  whose  spon- 
sors sit  in  high  places. 

Those  who  buy  shares  to  sell  them  at  a  higher  price 
usually  have  little  regard   fcir  niceties  of  valuation,  and 


312 


TIIR  ECOXDMICS  Ol'-  M/XIXG 


consider,  pn^pcrly  vu.^u-h.  tiiat  market  cmuliti.ins  arc  a 
nir.rc  iniii,.rtant  factor  ihan  any  academic  ratiocinations; 
luK.  even  for  those  scnticmcn   who  dahhle  on   the  danger- 
ous margin  of  the  fniancial  rajnds,  it  uill  l,j  f.^ind  weU  to 
have  an  idea  <<{  that   which,  is  the   funchiniental   hasis  of 
their  speculations.      Sooner  nr  later,   they   must    face  the 
facts:  every  si)eciilat.)r  eventually  fails  to  find  one  more 
reckless  than  him>elf.      (  )re-re~.erves.  an<l  profit,  derived 
frnni   them,   are   the  essence  ■  f  successful  mining  enter- 
prise;   without    them,    the    mine    is    only    a    hole'   in    the 
ground.     Dividends   indicate   the  surplus   of  a   moment; 
they  arc  no  criterion  of  future  returns,  unless  these  are- 
in>ure<l   by  accurately  measured   reserves  of  ore.      Low 
costs  are  a   symptom  of  healthy   economv,  but  thev   do 
not  guarantee  profits ;  they  simply  prove  that  the  minus 
quantity  to  be  deducted  fmm  the  value  of  the  production 
is  relatively  small.     Good  management   does  not  make  a 
mine;  it  is  o„Iy  an  aid.     We  .sympathize  with  the  unfor- 
tunate Ilritisher  who.  after  several  experiences  with  poor 
mines  and  j^ood  managers,  is  said  to  have  exclaimed  that 
m  future  he  would  invest  in  mines  that  could  stand  bad 
mana,i,rement.     Properly  ascertaine<I  resources  in  the  form 
of  orelx-xlies.  thorous-hly  sampled  and  measured,  are  the 
only  assurance  of  the  lono;  life  of  a   mining  enterprise; 
and.  without  such  assurance,  it  is  not  an  investment.    P.ut 
tliis  does  not  belittle  the  worthiness  of  sensible  specula- 
tion, which  has  been,  and  ever  will  be,  the  quickest  wav  to 
make  money.      We  simply  desire  to  emphasize  the  essen- 
tials of  an  'inveMnient.'  which  is  the  attractive  term  too 
generally  applied  to  schemes  of  an  essentially  speculative 
character.     Pay  your  money  and  take  your  choice:  but, 
for  the  sake  of  sound  mining,  let  us  make  di.stinctions 
which  are  essential. 


MINE  VALUATION 

(January    19,     1905.) 

Ttic  Editor: 

Sir— I  (juote  from  the  editorial  in  your  issue  of  De- 
cember 8,  KJ04,  entitled  'The  Loi^ic  of  \"aluation' :  "In 
the  first  pL.ee,  an  investment  in  a  well  developed  copper 
mine  should  yield  lo  per  cent;  secondly,  5  per  cent  should 
be  set  aside  for  a  sinkinpf  fund  to  redeem  the  principal. 
By  the  annuity  tables,  it  is  found  that,  assuming;  10  vears' 
life  for  the  mine,  the  number  of  vears'  jjurchasc  of  divi- 
dend to  yield  10  per  cent  income  and  redemption  of  prin- 
cipal at  5  per  cent  compound  interest  is  6.14  years.  This 
6.14.  multiplied  by  the  annual  dividend— $4.80— makes 
$29.47,  say,  $30.  which  is  the  amount  that  should  be  paid 
per  share  to  pve  the  purchaser  10  per  cent  income, 
and  return  to  him.  at  the  end  of  10  years,  the  price  which 
he  paid  for  the  share." 

I  encounter  this  iiuestion  of  "so  many  years'  purchase, 
at  so  much  income,  and  redemption  of  principal  at  a  cer- 
tain interest,"  very  fre(iuently  :  and  I  am  free  to  sav  that 
it  is  obscure  to  me,  thoui^di  I  have  no  doubt  it  works  out 
in  a  very  simple  form.  .As  a  matter  of  fact,  this  whole 
matter  of  capitalization  nf  a  debt,  annuity  etc.  amortiza- 
tion, number  nf  years"  purchase  of  dividend  sinkintr 
fund,  and  annuities  is  only  vai:;nely  understood  by  me, 
and  I  shoubl  like  to  obtain  some  convenient  manual 
whereby  I  can  post  myself  thoroughly.  C'an  you  recom- 
mend anythin_i,v  on  the  list  of  works  handled  by  your 
JoL'KN.Ai.  that  will  fill  the  hill? 

There  may  he  others  amon<j  your  sul)scrihcrs  whose 
experience  with  financial  questions  of  this  particular 
nature  is  as  limited  as  mine;  ami  if  you  would  elucidate 
the  point  mentioned  in  your  editorial  you  would  confer  a 
favor  on  us  all. 


Parral,  Mexico,  December  19,   1904. 


E.  H.  W. 


;U4 


77//:  r.COXOM/CS  01-  M/XfXG 


[  1  lie  ain.irtizatiMn  of  capital  invested  in  eciiiipiiiciit  a.> 
related  to  the  deerea.-ed  oust  attainetl  by  such  additional 
machinery   has  lieen  disciissetl  in  this  Joikxal  by  several 
writers,  notably   .Mr.  II.  C.  Ibniver.  in  our  issue  of  Marcli 
-4-    i'/J4-     A   discussion  ensued,  and   to   this  inir  corre- 
sjiondent    is    referred.      Amortization    is   the    recovery   of 
cajmal   uivoted.  at   the  end  of  a  certain  term.      Xtunber 
of  years'  purchase   niean>  the   luunbcr  of  annual  profits 
which  tiii^ether  represent  a  return  of  the  capital;  a  mine 
sold  for  $100,000  is  bought  at  live  years'  purcha.se  if  it 
yields  $20,000  profit   per  amuun.     'I'he  iim-stion   of   life 
and  return  of  capital  on  the  basis  of  an  annuilv  is  a  more 
com]  Heated  question.     In  1X1 1   Inwood's  tables  were  first 
publ'.died  ;  they  K'\e  the  pre.M'iit   value  of  an  annuity   at 
duferent   rates   per   cent    for   any   munber  oi   years   and 
replacement  of  principal  on   termination  of  the  annuitv. 
What  immediate  lump  ^imi  must  one  pav  to  receive  $Jt 
annuity  and  have  the  money  paid  for  the  ainuiitv  replaced 
at  the  end  of  25  years?     The  tables  in  (|uestion  tjive  the 
answer  in  the  form  -f  the  number  of  years'  purchase  of 
the  annuity.     At  5  per  cent,  the  present   price  to  be  paid 
for  a  25  years'  annuity  is  14  years'  purchase  oi  antuiity. 
These  annuity  tables  can  Ix'  applied  to  the  valuation  of 
mine   shares,  and   they   have  been  so  ajiplied  by  the   in- 
vestors in_  South  African  mines.     We  applied  the  methoil 
recently,    as    ipKUed    above    by    our    correspondent.      Of 
course,  as  a  nile,  mining  enterprises  do  not   ler.d  tlu'in- 
selves  to  such  logical  Ireatnient,  as  investors  rarelv  lock- 
up their  scrip  for  five  or  ten  years,  either  actuallv  in  q 
safe  or  mentally,  by  their  way  of  re.gardi-ig  their  com- 
mitments.    lUit  the  mine  which  has  ceased  to  l)e  a  ])ros- 
pect— essentially  a  .gamble— and  has  developed  even  l)e- 
.vond    the   early    stages.    v.Ikii    it    is   a    highly    speculative 
risk,  10  that  sta.ge  of  assured  productiveness  wliich  war- 
rants  the  application   of   the   term   'investment'— such    a 
mine  can  be  valued  in  a  logical  manner  or  else  it  should 


MINE  VAIA' 

Xumhcr  of  years'  Purchase  of  Di:id, 
Income  and  ReJem/^lion  of  Prin, 
Interest). 

I.lfe.                   Cent.  Crnt.  Cent. 

■ 05  04  .03 

2 1..%  1  Xt,  i.8i 

3 2.72  2. by  2.(t2 

■♦ .3-54  .3.46  },.T,o 

5 4-3.3  4--'i  4.10 

6 5  or  4  r)_.  .,  ;6 

7 .'^•"X  .T  J^-'  :;  40 

° 0.46  f)  ji  r  ,,7 

9 7-II  ('.So  f,  i^i 

'o 7".2  -  .^()  702 

" S.,^0  7  Sf)  7.^0 

l^ «.«()  S.,?,S  7.„4 

'3 0.,!'?  «.8s  8  ;6 

'4 900  030  874 

IS 10. .38  071  0.,, 

'6 10  84  10.  in  Q  _;[; 

'7 11. J7  10  48  0.76 

'•' "60  io,8,i  10.06 

19 12  08  II  16  to  ^1, 

20 12.46  11.47  10  50 

2' I -'82  II  76  10  Si 

22 '3-  "'  12  04  M.of) 

23 I.V40  12.30  II  J7 

24 1,1  8<i  ij   :;:;  n   47 

25 14  «)  12  78  ir.(,5 

26 14  .17  ivoo  II  8.' 

^l 14  ''4  i,V2i  ii.,>S 

2^ 14  00  t.V4i  12   u 

29 15- 14  1,3.59  12.28 

^° IS  37  13  76  12.41 

^' '.=^50  1,3  03  T2   =3 

^2 15.80  14.08  12.65 

^i 16.00  14.2,3  12.75 

•^4 If'  fO  14. ,37  1285; 

•^S 16. .37  IJ..50  T2   05 

^^ 16.54  1462  F3.0.3 

^l '^  "I  M  74  1,3   12 

•^« it^X?  .485  13,10 

■'9 1702  14. (,5  ,,  j„ 

40 17.16  15    O)  !  )    -5^ 

-tS 17.77  '5  46  i,i  fo 

5° '«-25  15.76  13,80 


IT  I  ox 


315 


■mi  ^>  ]'irltl  h  to  10  Prr  Cent 
■ital  ($  Per  Cent  Cmnf^ound 


M  8  Per 

.■\t  0  IVr 

.M  10  I 

Cent, 

C.-nt 

C.-nt 

03 

.92 

.91 

1.78 

I    76 

I    74 

2.. 58 

^53 

2  40 

3  31 

3.24 

3   17 

3. 09 

3  «•! 

3  79 

4.62 

4    10 

4, 56 

5    21 

5  0.3 

4.87 

5.75 

5 .  53 

5  34 

tl.2-^ 

6.00 

5  76 

671 

6   ,2 

f'  14 

7  14 

6  81 

6   ;o 

7  54 

7   16 

6  81 

7.90 

7-49 

7  10 

iH 

7.79 

7  ,39 

«.56 

8.06 

7.61 

8.8s 

831 

7  82 

0. 12 

8  54 

8.02 

0.37 

8  76 

8. 20 

O.fK) 

8.05 

8  ,37 

9.82 

9  13 

8  51 

10. 02 

9.29 

8.65 

10.20 

9.44 

8  77 

10., 37 

0-58 

8  88 

10  53 

9  71 

8.r)<) 

10  ()7 

9  82 

9  08 

10  Si 

9  93 

0  16 

10.04 

10.0.3 

9  24 

r  I  o.i 

10   12 

9  .31 

ir.i6 

TO   20 

9.37 

11.26 

10.27 

9.43 

I '  35 

'0  .34 

9.4S 

II   ;3 

10.41 

9.53 

'•51 

10  46 

9  57 

II  50 

10   !:2 

0.61 

1 1 .  65 

'O.57 

9.64 

11  7-' 

10.61 

9.f)8 

1 1 .  78 

10  65 

9. 71 

11.8? 

10.69 

9  7.3 

11.88 

10.73 

9  76 

"03 

10.76 

9.78 

I 


12    tl 


12.23 


10.88 
10.96 


9.86 
9.92 


.•:i(; 


////:  licoxoMics  or  mim.w; 


he  k't  aliHK'.  l-'ipr  tin.'  emu  i.  nieiici'  of  nur  rraiKrs  w  c  add 
tlic  annuity  taMcs  referred  u<.  as  tliey  apjiear  m  Tiie 
Mines  of  the  Transvaal."  ])nl)lislied  liy  Tin-  Sidlist.  a 
London  tinruiL'ial  journal  wliieh  lia,^  done  piod  work  in 
this  deitarinieut  of   nnniuL;   business  ^I'-nrruu.] 


GRAVEL-MINING  COSTS  IN  ALASKA  AND 
NORTHWEST  CANADA* 

By  lhestkk  W.  I'l'kingkin. 

(Ii'liruary    q,     1905.) 

Tlic  (laia  in  tlic  tahlr  on  pa^c  318  ha\c  btcn  compikit 
from  statistics  CdlU'ctcil  durinj;'  a  recent  inspection  of  the 
placer  fields  in  Alaska,  Yukon  'I'erritory  and  nortlicni 
llrilish  (."()hinil)ia.  Of  the  statements  ti'mished  by  opf  ra- 
ters, only  those  which  are  considered  lelialile  have  been 
used.  The  \vt)rk  attempted  had  no  relation  to  the  sani- 
plinj^  or  valuing;  of  mining  properties,  and  time  did  not 
permit,  usitally,  of  the  measuring  of  the  ground. 

Owing  to  the  varying  contlitions  governing  the  cost  of 
mining  in  the  \orth,  the  territory  has  been  divided  into 
three  provinces.  The  South  Coa.st  province  includes  the 
Juneau,  Porcupine  and  Sunrise  districts  of  Alaska.  The 
Interior  province  includes  the  Atlin  district  of  British 
Columbia,  the  Klondike  district  of  Yukon  Territory,  and 
the  b'ortymile.  Eagle,  Birch  Creek,  b'airbanks  and  Ram- 
part distiicts  of  .\laska.  The  Seward  Peninsula  province 
includes  the  Nome,  Council  and  Solomon  districts  of 
Alaska.  The  Xizina  district  of  the  South  Coast  province, 
and  the  Port  Clarence,  Fairhaven.  and  Kugrok  districts 
of  the  Seward  Peninsula  are  separately  considered. 

In  preparing  the  sheet,  the  working  costs  of  1 18  differ- 
ent operations  were  first  tabulated  with  reference  tc  the 
method  employed  and  to  situation.  A  second  table  was 
then  prepared,  in  which  the  working  cost  was  augmented 


*  The  fiiiurcs  that  nro  pivcn  hore  arc  ■  "'ictpd  frnm  a  re- 
port nil  tlu'  'Costs  .111(1  Methods  (.f  dravcl  and  Placer  Mitiing 
ill  Alaska.'  and  here  pnhlished  liy  permission  of  the  Director  of 
the  I'nited  States  Genlojiical  Survey.  The  data  furnish  as  near 
approximations  as  the  nature  of  the  work  permits.  The  cr. -.t  of 
.nil  supplies,  rates  of  transportation,  cost  of  Inhnr,  and  dfsrription 
of  water,  timhor  and  fuel  resources  in  all  important  parts  of  the 
territory,  as  well  as  full  descriptions  of  all  the  methods  of  min- 
ing employed,  will  he  civen  in  the  final  report 


.•?is 


/■///:■  /:C0.vr).i//c-.v  or  M/.\/\, 


I'v   an   amount    [kt   cul.:,    vanl    Ium.I   ,in    alluuamv    in,- 
<!q>rcciatinn  ,,t  i,la„t.     A  j^naTal  li.^urc  ,,i  mx  vcars  wa. 
taken  as  tiu-  avrra.^c  Iiu-  ,,i  an  individual  prnp'^riy    and 
rxccpt  in  llu.  ca.c  .,1   wniirr  dnltin^  -iHTaiinn.,   I  j,,  ,la^  s 


as  the  workinjj  season.  1,  ,va.  Hun  a.M.nud  that  live 
annnal  payments  are  mad.  ,,,  a  deprecatinn  fund.  The 
fund  .s  equivalent  .„  ,heo.>t  .,f  plant  an,!  n.aintenance 
of  same  dnnn^  the  hfe  .f  , he  pn.penv.  pht.  s>x   years' 


;lil 


Ch'.lllL-MLMXC  COSTS 


.•?l!l 


>ini|ili  intiTiNt  nil  tlu'  ii)\c-munt  at  5  ;Hr  cent.  Facli 
annual  pavnuiit  u.;^  dividrd  hy  tin-  stasnn's  outptit  in 
ciiliic  yard^;.  and  tlir  animnit  llnis  ohtaincd  added  to  tin- 
daily  workint,'  cxikiims.  to  <^<.i  the  tntal  nniput  c^t  pir 
yard,  as  far  as  possible.  Prices  paid  for  niininj,'  ])ropertv 
arc  taken  no  accr-uit  of,  as  tlicy  represent  an  imknown 
factor.  In  cases  where  expensive  plants  have  hcen  in- 
stalled the  ainnrtizatinn  was  separately  fit;nred  for  each 
case.  In  cases  of  shoveliiiLr-in  and  small  mechanical 
Jilants,  the  installation  and  maintenance  cost  was  taki'ti 
at  an  avcra,i,'e  amomit  for  a  ^jronj)  of  operations  in  eacli 
district.  Where  th'.'  operatiin  implies  an  addition.a!  .stri]) 
pint,'  of  overlmrden.  which  is  always  separately  charcrcd. 
the  cost  was  distrihntcd  and  added  to  the  gravel  extrac- 
tion cost. 

I'roni  the  second  table,  where  the  costs  were  r<diicid 
to  one  tiy;iire  f.)r  each  <listrict,  a  third  table  (as  rrjvi n  1 
was  prejiared,  ^ivint,'  as  nearly  as  possible  the  avcrai;e 
cost  for  each  of  the  17  separate  methods  considered  in 
one  or  more  of  the  three  iirovinces.  Where  the  opera- 
tions from  which  the  averares  are  derived  exceed  two  in 
number,  the  <'act  is  so  indicated  in  the  table. 

1  he  attempt  has  Ix'cn  made  to  reject  rifj:urcs  which 
were  evidently  not  representati\e.  The  final  figure  ar- 
rived at  is  not,  however,  always  satisfactory,  l-'or  exam- 
ple, under  \'o.  5  (the  method  of  workini,'-  ojnii-cut  by 
shoveling  into  wheelbarrows,  whcelintx  to  b'..ckct.  hoist- 
ing and  convcyinp;-  to  sluice  by  self-dumpiiiL,'  carrier  or 
cable).  $2.14  is  representative  for  the  Klondike,  where 
seepage  water  is  generally  pumped  from  the  pit,  and 
many  operators  pump  the  water  for  sluicing.  On  the 
other  hand,  a  plant  in  the  llirch  Creek  district  of 
Alaska,  mining  only  22  cu.  yd.  per  day,  and  handling  the 
water  by  a  drain,  operated  at  a  cost  of  $1.50  per  cubic 
yard.  In  Xn.  13  (drifting  solidly  frozen  groun.l,  steam 
or   hot-water  thawing,   hoisting  and   convevimj  with   the 


-1 

m 

'■■m\ 


n\\ 


320 


JUL  LCO.WMJl^  Ui  .\n.\L\G 


use  of  the  .sclf-ininipiiif;  biKkct),  the  cost  in  the  Klon- 
dike is  $1.95;  while  the  liii;her  lij,'ure  j;iven  is  arrived  at 
by  comhiiiini;  the  e\piii>;.r  American  camps  of  I'drty- 
niile  and  l'aiil)aiik>.  wluri.  the  i.d>t  is  $4.03  and  ?3.5<)  re- 
spectively. 

The  hijjli  cost  of  liydrauliekiii);  uiili  use  of  hydraulic 
lift,  in  tile  Seward  Peninsula,  i>  caused  by  the  ditticnlty 
of  moving:  the  gravel  to  the  bedrock  sluice,'  and  the  ex- 
pense of  the  ditches  and  installations.  liydr.-iiilukm- 
by  means  of  wati.r  undtr  natural  head  without  the  u.^e  of 
the  hydraulic  lift,  (jr  ^^  me  otliei  means  nf  elevating;  the 
material,  was  not  seen  in  the  Seward  IVninsula.  it  is 
known  that  a  hydraulic  plant  is  in  successful  operation 
at  Bluff.  50  miles  to  the  east  of  Nome,  hut  no  data  an. 
available.  In  the  interior,  only  bench  j^ravels  are  liy- 
draulicked.  Steeper  grades  for  sluices  can  be  obtained, 
and  the  gravel  is  more  easily  moved.  The  lii,L;h  duty  of 
the  miners'  inch  in  the  Klondike  is  a  large  factor  in 
bringing  down  the  co-t  of  .\d.  1  and  Xo.  16.  It  should 
he  distinctly  understood,  if  h\  draulicking  costs  in  the 
interior  appear  attractively  l^w,  that  the  water  supply  is 
exceeihnglv  variable,  and  that  nn  nlijible  estimate  can 
be  made  beforehand  of  the  ontput  of  a  given  season's 
operations.  I'urtherniore.  while  much  of  the  bench 
gravel  was  originally  rich,  the  ])a\-streaks  have  been 
largely  drifted  out.  and  the  gold  is  not  disseminated 
through  the  upper  portion  of  the  gravel  to  the  extent  that 
it  is  in  California.  With  regard  to  the  pumping  of  water 
for  hydraulicking,  the  practice  cannot  be  too  strongly 
condemned.  He  is  a  bold  man  who  attmipts  it.  and  a 
singularly  fortunate  one  who  makes  a  tinanci.al  success 
(if  it. 

Mr.  Stephen  Birch,  operating  in  the  Xizina  district  of 


'  This  ilitliculty  is  due.  not  only  to  the  exceedingly  gentle 
grades  of  the  streams,  but  also  to  the  shingly  character  of  the 
iiKitcri.'il  haiidlf'l. 


(ll^irr.I.  MIXING  COSTS 


•.\2\ 


Alaska,  has  courteously  funii>lu'.l.  tor  iliis  npdrt,  a  sinn- 

in.iry  of  tlio  costs  of  workiiij^r  jilaccr  f^nnitid  mi  Dan  creek. 

'I'lusc  tij,'iircs  are  given  hcrewitli,  as  they   imply  a  total 

ciiari;e  nf  invested  capital,  in  addition  to  working  costs 

against  one  season's  o[uTations. 

By  pronnd  sluicing  through  20-in.  Iluiiie,  6..S0.?  cu.  yd.. 

$8,781.44,  or  $1.14  per  cuhic  yard. 

i'.y    use    of    S  in      cotton-pressure    hose    and    nozzle, 

flirough  20-in.   Hume,    i  ,6(X)  cu.  yd.,  $i.457.(>j.  or  $091 

per  culiic  yard. 

I  so  of  pick  and  shovel  only,  through   lo-in    sluice-box, 

2,320  cu.  yd.,  .$5,100,  or  $i.,S7  per  cuhic  yard. 

27,vft.  luimel.  6  hy  6  ft.,  tinihered.  $1,017.00,  or  .S,V72 

lur  running   t'oot.      (  )r  407  cu.   \.l.   of  grav<  1   removed. 

\\lii>h  co^t  $-'.50  i)cr  cuhic  yard. 

-Mr.  IJirch  adds:  •■\\hilc  the  cost  ma>   seem  high,  it  is 

hecausc  of  tile  i.u-t  that  u  iiKhi.Ks  the  to(il->  and  material 
now  on  hand,  which  were  necessary  to  remove  this  gravel. 

Now.  if  this  work  is  continued  for  a  number  of  years,  the 
<lepreciation  of  the  fiojs.  etc.,  could  he  charged  propor- 
tionately. 'I  hese  prices  may  n^t  he  a  eriterion  for  future 
operations  in  that  country,  hut  were  our  lirst  cost  of  oper- 
ation, and  an\  --trangcrs  going  into  th.at  section  of  coun- 
trv  would  he  apt  to  run  \V)  their  costs  to  {\\v^c  tu;    res." 

1  he  cost  of  ^h.iveliiig  into  sluice-ho.xcs  in  the  rcinote 
parts  of  the  Seward  I\iiiii>nla  reaches  to  ,$5  per  en.  yd.. 
and  even  higher.  Some  drifting  ojierations  have  been 
carried  on  in  the  Kugrok  and  l"airhaven  districts,  on 
which  figures  are  not  at  hand. 

Dredging  estimates  furnished  hy  reliable  interior  oper- 
ators place  the  cost  at  Hoc.  per  cu.  yd.,  where  gravel  must 
be  thawed  by  points  ahead  of  the  dredge.  In  the  Seward 
ll'iiinsula  it  is  estimated  that  if  the  [)roperty  is  sutficipntly 
large  for  a  lo-year  life  to  bi.  allowed,  a  dredge  can  be 
oi)erated  at  the  cost  of  30c.  per  \(1.  The  field  for  dredges 
in   i>l.icer   mining   in    .Vlaska    is    extremely   limited.       In 


■Si^  a  I 


THE  ECOXOMlL  .s  ui-  MJMXC 


the  Siward  IVniiisiila  it  is  not  impossible  tliat  some  of 
tlie  wide,  shallow  creek  deposits  will  be  worked  success- 
lull}  b_v  means  of  the  steam  scraper.  The  cost  of  an 
experimental  oiieration  uu  (  ipliir  creek  was  said  to  be 
under  20c.  per  yd. 

The  costs  of  operating  by  two  mechanical  systems,  in 
the  Seward  Peninsula  (involving  the  labor  of  men  in 
shoveling  into  cars  and  iramminj,'.  in  the  one  case  to  the 
bottom  of  an  incline,  and  in  the  other  to  a  bedrock  sluice 
leading  to  hydraulic  ek\atnr  throat),  are  unfurtunatcly 
not  available  for  i)ublicati(!n.  The  derricking  system. 
X<).  ",  however,  both  in  the  interior  and  the  Seward 
Peninsula,  apjuars  tn  be  superior  in  pnint  of  cost  to  either 
I 'I  the  above  nientioncil,  for  the  Wdrkiiig  of  the  average 
.Alaska  open-cuts. 

Frozen  ^rmnid  cannot  be  att.icked  with  success  by  the 
steam-shovel.  Kven  where  it  dig>  the  gravel  successfully, 
if  men  follow  it  clean  to  bedmck  bv  hand,  the  cost  of 
operating  is  sometimes  dnubkd.  Tin.'  i-team-shovel  has. 
however,  a  i'n\i\  in  northern  placer  nuniiiL;, 

Regarding  niechanical  o[)eralion^  in  general,  the  nn- 
poriaiu  principle  shnuld  be  eiiiphasi/.e(!  that  the  main  e.K- 
pense  is  getlinj;  the  material  into  the  receptacle  which 
conveys  it  to  the  sluice  or  washuig  jjlani.  Tramming, 
even  for  a  long  distance  and  to  a  considerable  elevation, 
adils  a  very  -mail  [)roportioiiate  anUiUni  ti.  thu  tutal  cost 
of  working.  The  establishment  of  a  permanent  washing 
plant,  economically  situated,  as  regard>  water  supply  ami 
diHiip,  slii'uld  lie  cimsidered  by  every  .\Iaskan  mnier  who 
proposes  working  tlu'  shallow  creek  deposits  which  char- 
acterize that  country.  The  isolation  of  the  washing  oper- 
ations, together  with  the  adoption  of  the  most  economical 
system  of  traniniing  {)ossible,  will  go  far  towaril  attaining 
the  ends  of  adei|uate  grade  and  re  in  for  tailing,  which 
are  the  sine  qua  nun  accompaniments  of  successful  gravel 
mining. 


•!? 


it 


THE   COST  OF  MIMNG 

(hUitiirlal.    February    lO.    1905.) 

On  another  pa,!,H  uc  pi.hlish  a  suRnrcstivc  contribution 
by  Mr.  W.  k.  Inj,Mll.N  on  tiu'  a>s\  of  mmin),',  a  Mihjcet  of 
the  mm,, St  iinpnrtance.     Wiutlirr  regarded  in  its  l.road 
econnniic  aspect  as  implyinp^  the  wlioie  process  of  winning,' 
the  metals,  or  in  the  narrower  sense  as  covering  only  the 
actual   hreakin-  ni  an-,  the  question  is  one  which  must 
appeal  to  the  readers  of  this  Joiknai.  i,,  a  uu^-i  practical 
way.     Just  as  in  ordinary  life  it  is  a  proverl,  that  niMricy 
is  easier  to  make  than  to  keep,  so  in  mining  it  is  not  too 
much  to  say  that  the  finding  of  ore  re<iuircs  less  skjH  th,„, 
the  heneficiation  of  it;  at  all  events,  the  haphazard  meth- 
ods of  the  one  must  ever  be  in  strong  contrast  to  the  log- 
ical ways  ni   tlu.  other.     The  subject  presents  tnanv  as- 
pects, each  of  which  invites  discussion.  There  is  the  gen- 
eral  (lue.stion   of   the  attamablc   mininuim   of  uxp,psc  as 
aft'ecting  the  wnrM's  oiupiu  of  metals,  and  the  relation  ot 
the  growing  rate  of  labor  to  the  increr.sing  application  of 
machinery;  there  is  the  accountant's  and  director's  view 
of  the  portion  of  cost  propiTly  chargeable  to  mining,  w  uli 
a  glance  back  at  the  days  when  development  was  charged 
to  capital   account,   and   perishable   machinery    to   assets 
Ihere  IS  a  gener.al  ini|niry  into  the  conditions  which  cause 
costs  to  vary  within  such  wide  limits  in  diffiretit  mining 
regions,  and  the  pertinent  subject  of  the  factors  contribut- 
ing to  particularly  creditable  results  at  individual  mines. 
Finally,  there  comes  the  broad  problem  of  practice  under- 
ground, where  more  money  is  lost  or  saved  than  is  dre;mit 
'if  in  tlu-  philosophy  of  the  average  investor.     These  are 
but  suggestions ;  our  own  views  will  find  I'xnression  at  a 
later  date,  when  our  friends  will  have  given  a  good  start 
to  a  discussion,  the  obvious  usefulness  of  which  should 
ehcit  a  widespread  expression  of  experience  and  opinion. 


7^ 


THE  COST  OF  MIMING 

1')^     W  .    K.    I.NGAl.LS. 

V  I  cliruary     i  ().     t  .)>  5  ) 

Tlicrc  is  perlmps  no  .>ul)jcct  more  difticult  to  gcneralizi'. 
'I'lic  cost  of  iiiiiiiiiij^  varies  according;  to  coiiilitions  in  a 
nianncr  so  obvious  as  lo  rc(iuiri'  no  antitlit'tical  citations. 
TlicTL'  can  be  no  (|uest.on  as  to  what  constitutes  tlie  ulti- 
mate cost  of  mining,  but  opinions  ditYer  as  to  wiiat  enters 
into  the  cost  during  a  limited  or  arbitrary  period,  sucli  as 
the  fiscal  year;  in  other  words,  accounts  are  kept  in  vari- 
<.ur  \va_\  s.  .\lan\  other  diUiculties  may  be  mentioned. 
Xotwithstanding  all  these,  it  is  \M'ttli  while  to  attempt 
some  generalizations,  making  due  allowance  for  the  vari- 
ables, since  it  is  onl\-  through  siicii  deductions  that  we 
obtain  standards  for  comparison. 

The  determination  of  standards  would  be  useful  in  at 
least  three  ways:  (  i  )  They  would  enal)Ie  the  mine  super- 
intendent to  know  if  his  work  were  being  done  as  cheaply 
as  it  ought  to  be  by  comparison  with  the  cost  of  similar 
work  elsewhere;  (2)  they  would  stimulate  efforts  to  re- 
duce ex])enses,  since  a  knowledge  of  the  cost  of  each  part 
of  the  work  indicates  the  <lirerti(>n  where  economy  can  be 
effected,  and  ( _0  they  would  furnish  die  engineer  who 
has  to  value  nunes,  especially  r"w  mines,  with  improved 
means  of  tstunatmg  the  probable  i.<st  of  mining,  and 
therefore  the  mi  value  of  the  ore.  The  cost  of  kci'ping 
accounts,  even  in  tlu'  fullest  detail,  is  so  slight  that  there 
is  no  good  reason  wTiy  they  should  not  be  kept  in  a  thor- 
oughh  instructive  manner.  The  value  of  any  accounting 
is  greatl\  diminished  if  it  be  not  so  systematized  as  to  give 
all  the  inlninialion  that  ma)'  be  commercially  or  technic- 
ally ie(iiiired. 


THE  COST  Ol-  MIMXG 


32o 


At  the  present  time  there  is  a  great  lack  of  recorded  in- 
formation such  as  w  ill  fiirni>h  the  desired  t^uidance  to  the 
ei'gineer.  It  is  a  fre(|iient  practice  to  estimate  that  be- 
cause a  certain  orebody  is  being  mined  in  one  place  at  a 
c.Ttaui  cost,  a  supposedly  similar  orebody  niav  be  mined 
at  another  place  at  approximately  the  same  cost.  Such 
comparisons  are  useful  as  checks,  but  constitute  an  un- 
trustworthy basis  for  estimates,  unless  the  analogies  are 
thoroughly  demonstrated,  since  in  the  outcome  it  often 
happens  that  the  actual  cost  of  mining  proves  to  be  widely 
different  from  what  was  forecast,  bec;nise  of  peculiarities 
m  the  particular  orebody  an.l  its  occurrence  that  had  not 
been  taken  into  account. 

I  have  recently  had  occasion  to  examine  several  reports 
on  a  large  deposit  of  low-grade  ore  occurring  in  a  locality 
where  there  \.'as  not  much  mining  precedent.  The  grade 
of  the  ore  was  low,  and  the  successful  exploitation  of  it 
depended  upon  a  large  tonnage  being  handled  at  a  close 
margin  of  profit.  It  was  a  case  where  the  probable  cost 
of  mining  should  have  been  estimated  with  the  utmost 
precision,  and  by  the  application  of  engineering  principles 
It  could  have  been  done.  The  mine  was  examined  by 
three  well  known  professional  men,  of  whom  two  at  least 
had  wide  experience  in  such  work.  The  cost  of  mining 
wa:.  estimated  by  one  of  them  by  a  rather  far-fetched 
analogy  ;  the  other  two  simply  expressed  the  .opinion  that 
It  would  |)robablv  be  a  certain  amount  per  ton.  no  reasons 
being  given,  and  no  references  to  the  conditions  alTecting 
the  cost.  The  estimates  of  mining  and  treating  the  ore 
were  certainly  at  fault  somewhere,  since  the  mine  prove«l 
unsuccessful. 

If,  in  estitnating  the  cost  of  mining,  as  in  estimating  the 
cost  of  smelting  and  other  engineering  processes,  the  esti- 
mate be  divided  imo  its  elements— the  probable  cost  of 
the  various  parts  of  the  work  that  go  to  make  up  the  total 
—peculiarities  affecting  the  total  cost  are  much  more  like- 


!!'() 


THE  liCOXOMICS  01-  MIMXG 


ly  to  riceivo  critical  attention  than  wlicn  a  Ininp  estimate 
is  made  witliont  an_\-  analysis. 

The  |)reseiUatii)n  oi  a  detailed  estimate  in  a  report  on  a 
ininini,'  pr()])ositioii  is  a  i,^(jod  deal  more  convincing,  espe- 
cially to  consulting  engineers,  to  whom  the  report  may  be 
submitted,  than  the  statement  of  a  single  figure  for  the 
total,  which  furnishes  uo  evidence  as  to  its  accnracy,  and 
ill  many  cases  can  be  prcmoiinced  no  more  than  "prob- 
able" or  "improbable"  or  some  other  uncertain  character- 
ization. It  may  he  .^ugge^te(l  that  (in  view  of  the  numer- 
ous reports  that  are  circulated  without  any  information 
as  to  the  cost  of  mining,  cost  of  plant,  etc.,  wb'ich  it  is  nec- 
essary to  know  .-ibout,  leavii,"'  it  to  tlie  investigator  to  de 
termine  those  factors)  we  should  be  grateful  for  what 
little  is  sometimes  otTered,  and  so  we  are,  but  it  is  not  that 
class  of  mining  report  to  which  I  am  referring  in  thi.-^ 
article. 

In  venturing  the  suggestion  that  it  is  possible  to  fore- 
cast the  probable  cost  of  mining  in  a  more  ratit:uial  man- 
ner, I  feel  sure  of  my  ground,  through  the  knowledge  that 
there  are  many  engineers  who  are  not  content  to  express 
inferential  opinions,  but  analyze  tiie  various  conditions 
that  atTect  the  cost  of  stoping,  traiuming.  hoisting,  timber- 
ing, pumping,  etc.,  and  that  there  are  such  technical  pa- 
per.s  as  that  of  Kiuzie  on  the  mining  ami  milling  methods 
at  Douglas  Island,  and  that  of  MacHonald  on  the  method 
and  cost  of  mine  timbering  :it  Kossl.uid,  and  manv  others 
of  the  same  class,  which  go  thonnighly  and  lucidly  into 
the  engineering  conditions.  We  need  more  |)apers  of 
tiiat  eliaracter  wh.icli  will  gue  inlnrmatinn  as  to  the  unit 
costs  under  nnnieri'U'-  and  \ariiius  conditions,  aiul  es[)e 
cially  the  unit  re(|uiremcnts  of  labor,  in  hours  of  work, 
and  material,  in  pounds,  tons  and  other  measures. 

In  making  ;m;ily>es  of  costs  for  purposes  of  compari- 
son, it  IS  essential  that  the  basis  for  itemization  sliall  be  as 
nearly    uniform   as   poi-^ible.        Some    recently    pul'isiied 


THE  COST  OF  MINING  327 

statements  have  permitted  the  following  tabulation, 
wliich,  thougli  admittedly  imperfect,  will  certainly  prove 
suggestive : 

Item.  A<                    B*  C 

I.   Miner,   and    helpers $o.j5  $o.4.?5  $0.4-"; 

-■I  rammers,   shovelors.   etc 0.41  o.,i(i5  o.-ijo 

J.   Urill    sliarpeiiing   and   repairs..  0.15  o  ijo  o    'Oi 

4.  Compressed    air „.  ijo  ooSi 

5.  Alamtenance  of  cars 0,01  o.(X)0  o  o<,S 

"    '■-.^■''"-'^'•■^    0.1,?  0..45  0.0.').. 

I    '.'"'^er    o.j.S  0,110  o  -'OS 

«.  limbermen    o.j,,  o.  „;o  o.o<j7 

'>.   Hoistnis    0.23  0100 

!o.  Pumping o  0,5 

II.  Supplies,  n.c.s.' 0.04  0.040  010= 

\2.  Supervision    0.J3  0.JJ5  > 

"Tota'   $-'.07  $2,065  $-'.070 

^Cripple  Creek.  Co!,   (reported  hv  J.  R    Fiiilay). 
^Centre  Star  Mine,   f^ossland.   H.'C.   (otiicial   report) 

liuiiker   Hill  and  Sullivan.  Ginr  d'.Mene  (official  report) 
^  Including  all  supplies  not  else^^  here  specilied. 
'Including  bosses,  assaying,  surveying. 

Tlie  above  clas.sification  appears  to  me  quite  useful,  al- 
though for  thorough  comparison  we  ought  to  know  the 
rates  of  wages,  c-onsumi)tion  of  certain  material  (esixrcially 
coal)  and  prices  of  the  principal  materials.  Items  i,  ^,  4 
and  6  give  substantially  the  cost  of  breaking  down  the  ore  : 
items  2  and  5  the  cost  of  loading  the  ore  and  delivering 
to  the  shaft:  item  <)  the  cost  of  hoi.sting  and  delivering 
at  the  surface  :  items  7  and  8  the  cost  of  supporting  th.- 
.grotind,  and  item  10  the  cost  of  kee|)ing  the  mine  drv. 
Each  of  the.se  steps  in  the  work  is  likely  to  vary  rather 
widely  in  difTerent  mines.  Tiie  ups  and  downs  mav  offset 
each  other  and  make  the  totals  abotit  the  same,  as,  for  ex- 
ample, in  the  three  cares  given  above,  but  they  may  not. 

There  are  comparativelv  few  mining  companies  which 
report  their  costs  with  the  above  d-tail.  \umerons  com- 
panies, liowever,  report  co.sts  iten.ized  as  follows:  i,  la- 
bor: 2.  coal:  3.  timber:  4.  explosives:  5.  other  supplies; 


.!L'S 


rill:   LCUXUMICS  UP  MIXIXG 


0,  -suiKTv  i,-i(in :  7,  adiiiini.-iratKiii  and  i^etKral  (.'Npcnsc. 
Siicli  a  j-tatiimnt  is  usclul,  hut  it  is  more  usffiil  if  tlie 
ittnis  arc  subdivided  according  to  the  various  hrancJKs  df 
tile  work. 

Ill  considering  the  comparative  cost  of  mining,  the  fol- 
lowing are  some  of  the  essential  conditions  determining 
the  result  which  it    -  neC(S,-ar\-  to  take  into  account: 

1.  Size  and  character  of  the  ore  deposit. 

2.  Method  of  mining,  (a)  ojien  cast,  (b)  underground. 
If  the  latter,  whether  rdom-and-pillar  system,  caving,  till- 
ing, timbering,  or  a  C(inibin;iliiin  i)f  two  (ir  more.  The 
projjortion  of  the  orelxidv  extracted  is  an  important  con- 
sideration. The  system  nf  breaking  the  gnnuul,  the  lay- 
out of  the  mine,  the  metlmd  of  handling  the  ore,  <lrainage, 
etc.,  are  determining  factors. 

3.  Depth  and  longitudinal  extent  of  the  workings.  In- 
crease in  depth  increases  the  cost  of  hoisting  an<l  pump- 
ing; increase  in  longitudinal  and  lateral  direction  in- 
creases tile  cost  of  traiuming. 

4.  Character  and  .amoimt  of  necessary  development 
w<irk  :  ;.  I-.,  the  w(irk  that  must  be  done  to  di.scover  and 
give  access  to  tlu-  ore.  The  amount  of  'dead  work'  that 
is  required  is  one  .jf  the  greatest  cau.ses  of  variation  in  tlv 
cost  of  mining. 

5.  Uuantity  of  water  to  be  r.ti'-ed  from  the  mine  and  the 
depth  from  which  it  mii>t  be  lifted. 

6.  Quantity  of  coal,  dynamite,  timber,  steel,  ttc,  con- 
sumed per  ton  of  ore. 

7.  Wages  of  labor  of  \-arious  kinds  and  its  (jualitv. 

8.  Cost  ])er  ton  of  co.al  and  its  ([ualit_\ . 

9.  t  o^t  per  potmd  of  (i\tiaiiiite  (various  grades). 

10.  Cost  of  timber  [kt  i  .ckx)  ft.,  board  measure. 

11.  Totis  of  ore  mined  per  annum;  tons  of  shipping 
product  sorted  out;  tons  of  waste  raised. 

12.  .Supervision  and  administration. 

The  conditions  which  are  most  closely  comparable  are 


Till-.  COS  I    ()!■  Ml.\l.\i; 


SLM) 


tliusc  of  larfjc  orohodifs.  cif  which  tlic  uhnlc,  or  ncarlv  tlic 
whole,  is  extracted  and  sent  to  the  mill,  as,  for  example, 
those  of  Diicktown,  in  Teiniessee ;  Mat  River,  in  Mis- 
souri ;  Homestake,  in  South  Dakota,  and  the  copper  mines 
of  Lake  Superior.  In  the  case  of  narrower  veins,  like 
those  of  Cripple  Creek,  comparison  can  he  made  only  h\- 
considerinpf  as  the  ore  all  the  material  that  has  to  be  taken 
out ;  hut  inasmuch  as  it  is  seldom  profitable  to  take  out 
more  than  enough  to  atford  workini:;^  room,  the  costs  in 
such  mines  are  necessarily  his^dier  than  in  those  wherein 
larjje  faces  of  ore  can  be  worked  in  preat  chambers.  Thj 
lowest  cost  of  miniuj,'  iij.;ht  theoretically  to  be  experi- 
enced in  larpfe  deposits  of  ore  that  can  be  entirely  extract- 
ed as  suitable  for  milling;  or  smcltinj^,  and  can  be  opened 
by  drifts  of  large  size. 

Considered  commercially — and.  after  all,  mining  is  sim- 
ply a  conunercial  business — the  true  cost  of  mining  is 
X  —  Y  =  A,  in  which  A  is  the  maximum  profit  realizable 
from  the  mine,  X  the  market  value  of  the  ore,  and  Y  the 
cost  of  mining,  including  all  oiulay  for  plant  and  develop- 
ment woik;  but  it  is  only  in  rare  cases  that  advance  esti- 
mates can  be  reduced  to  these  elements.  However,  the 
cost  of  getting  to  the  ore  and  the  co.st  of  plant  tor  its  ex- 
traction are  certainly  faclors  in  the  cost  of  mining;  this 
leatls  to  the  much-discussed  (juestion  as  to  how  the  ex- 
pense for  new  construction,  and  great  developments,  like 
new  shafts  or  adits,  should  be  charged  in  annual  state- 
ments of  mining  costs. 

It  should  be  recognized  clearly  that  any  useful  comi)ari- 
son  of  costs  can  be  made  only  in  the  light  of  analysis  of 
all  the  (letei mining  nuKlitions.  The  cost  of  mining  at  one 
place  may  be  S3  [ler  ton  and  at  another  place  only  $2.  yet 
the  better  work  may  really  l)e  done  at  the  former.  In 
itemizing  the  various  elements  of  cost,  such  as  breaking 
ground,  shoveling  and  tramiuing,  explosives,  timbering, 
pumping,  etc.,  and  comparing  them,  we  shall  arrive  closer 


330 


run  RcoxoMics  op  mixixg 


tn  the  actual  rc>uli>,  hut  we  .-hall  fail  to  ^et  al  the  truth 
unless  \vi'  cdtisider  the  ])ri)p(irtiijn  of  the  orehndy  ulti- 
mately won  and  the  linal  jirotit  in  its  extraction.  Mr.  J. 
K.  I"inla\'  expres-es  this  principle  so  clearl\  in  discussing; 
the  cost  of  ininintx  ^'t  Cripple  L'reek.  L'ol.,'  iliat  it  is  useful 
to  repeat  some  of  his  remarks,  lie  says:  ".\  low  cost  per 
ton,  either  of  crude  rock  hoisted  or  of  sorteil  ore  shipped, 
dois  not  necessarily  indicate  I'ither  good  mining  or  good 
managi'inent,  and  is  nearly  as  apt  to  indicate  the  contrar_\ . 
Two  mines  ma\'  l)e  working  in  exactly  the  same  kind  of 
ore.  and  one  ma\'  ship  ore  at  more  than  twice  the  cost  for 
mining  that  the  other  does,  and  yet  be  doing  belter  work 
and  making  larger  profits. 

"At  C'ri])ple  (reek  the  ore  occurs  in  a  multitude  of 
small  wins,  either  single  or  in  aggregates.  In  the  small 
se.ams  which  constitute  either  the  vein  itself  or  a  compo- 
nent \y.\ri  of  it,  the  ore  is  rich,  but  the  rock  on  the  walls,  or 
between  the  seams,  is  either  whollv  or  partly  waste.  The 
ricii  seams  may  vary  in  thickness  from  a  mere  crack  to  a 
foot  or  two;  and  for  these  uiilths,  it  may  carry  from  one 
to  several  hundred  ounces  gold  jxt  ton. 

"There  are  no  large  orebodies  in  Crip]ile  Creek.  It  is 
doubtful  if  any  single  orebody.  or  even  any  single  vein, 
has  produced  100,000  tons  of  sliijiping  ore.  The  largest  an<l 
best  Veins  have  l)een  found  in  the  granite,  where  tin-  rock- 
w.alls  themsilves  are  sometimes  uniformly  inipregn.'ited 
with  value  for  a  width  of  _^o  or  40  ft.  In  such  places 
large  amounts  of  clean  ore  h.ive  been  mined  and  shipped 
without  sorting,  but  only  in  the  swells;  when  the  vein 
narrows  down  it  is  .always  necessa.ry  to  break  some  waste 
in  order  to  in;ike  roum  to  work. 

"  1  he  ori ,  tlurefore,  i--  mined  from  veins  of  such  a 
character  that  it  i-  impossible  to  get  it  mit  without  mixing 
with  some  •    )rthless  rock.      The  problem  of  h.uidling  this 


'The  f"\<;iNTKKiNi,    wn  Minini;  Jiuknai.  Xovcinbi-r  .'i,   \^y^x 


77//:  COST  or  MI  mm; 


:v.u 


ore  ocoiiriniie-ally  (lc])iti(ls  on  tlu'  cnst  <>i  treatment.  This 
cost  is  at  present — and  is  likely  to  be  always — so  liipli  tliat 
it  becomes  very  essential  to  throw  nut  as  much  waste,  or 
low-grade  nre,  as  possible  before  shipping.  Could  tl.e  ore 
be  treated  for  a  dollar  or  two  a  ton,  the  proposition  wonld 
be  entirely  ditTerent." 

The  ore  shipped  from  Cripple  Cretk  is  a  concentrate- 
produced  by  hand  sorting.  .Numerous  mines  in  other  dis- 
tricts are  operated  tuider  similar  conditions.  Even  at 
Lake  Superior  a  considerabK'  ])ropnrtion  of  barren  and 
lean  rock  is  sorted  out  nf  the  rock  h  listed,  in  order  to 
iffect  a  ]ireliminary  concenlration  of  the  ore  before  send- 
ing it  to  the  stamp  mills.  This  leads  to  a  consideration  of 
the  point  where  mining  leaves  off  and  ore-dressing  be- 
gins. Probably  there  will  be  no  disagreement  that  sorting 
practiced  on  the  surface  is  technically  a  process  of  ore- 
dressing,  but  .sorting  is  also  done  underground,  and  while 
that  migli'.  also  Ik-  technically  considered  a  process  of  ore- 
dressing,  it  would  be  highly  inijiracticable  in  bo<ik-kee])ing 
to  distinguish  between  it  and  mining. 

These  features  indicate  some  of  the  difficulties  in  re- 
ducing the  cost  of  mining  under  various  conditions  to  anv 
sound  basis  of  comparison.  Unquestionably,  however,  an 
analysis  of  the  elements  of  cost  would  bring  us  nearer  to 
sucii  a  basis,  and  an  examination  of  the  costs,  as  officially 
reported  by  various  mining  companies,  will  .show  the  de- 
sirability of  such  an  analysis.  It  is,  for  example,  difficult 
for  anyone  not  familiar  with  the  special  conditions  to 
underst:nid  why  the  cost  of  extracting  a  ton  of  ore  from  a 
great,  \\ell-e(|uippeil  mine  like  tlu-  .\nae(inda  should  be 
$3.50  per  ton,  when  ore  is  mined  for  $2  per  ton  at  Cri])ple 
Creek,  Col.  .Anyone  examining  the  reports  of  the  Laki 
SujxTior  copper  companies  is  natur.ally  led  to  iiKjuirc  why 
the  cost  of  mining  in  the  .\tlantic  is  only  f>oc.  per  ton,  and 
in  sotue  other  mines  of  the  same  district  twice  as  much. 
.\iiother   intere.NlinLT  (Uiestion  woidd   n;itur.-d!v  -irise  as  to 


:v.\'2 


illli   IC(>.\(>\IU'S  ()!■   MISISC, 


whv  mniiny:  i-an  \w  cl<'iu'  willi  inML;nitu'ant  cipuimuMil  and 
>.i)  iluaplv  a-  it  lia>  Int'ii  in  tiir  jn]ilin  ili-trict  nf  Mis- 
s(  luri. 

It  i^  Impfd  iliat  a  discn'-sii  in  of  tlu-c  (|iution-  ami 
(itlnTs  i,f  tlir  >anK-  iIiaractcT  will  Ik-  taken  uj)  ni  turtlur 
nnitrilniliuns. 


THE  COST  OF   MINING 

The  Editor: 

SiK — As  Mr.  liif,Mll>  lK'^nn>  I)>  -annc;  in  lii ;  rect  nt  arti- 
t-lr.  till'  uiattrr  .it  the  i)rn]KT  oust  fur  iiiiiiin}j;  is  i  liard  sul)- 
jtct  to  ,i,niKTalizf.  hut  1  am  of  the  imi)rfssinn  that,  if  more 
I'ompaniis  puhlislud  their  costs  in  i)r()pi-r  detail,  the  ditTi- 
euitv  of  i^eiurahz.ition  ■,  onhl  he  nuicli  less,  hec.'use  even 
in  cases  of  wide  difference  of  conditions,  tliere  would  still 
he  found  operations  in  which  the  conditions  weie  more 
or  less  parallel.  1  have  amused  myself  in  comiKiriuL,'  cer- 
tain items  of  cost  at  the  Treadwcll  mine  in  .\laska.  as 
pnhlished  hy  Mr.  Kin/ie,  and  those  of  the  Portland 
mine  at  Cripple  ("reek.  At  first  ij;lancc  one  nus^dit  say 
that  in  no  tv  o  jilaces  could  the  conditions  he  more  dis- 
similar— the  'Ireadwell,  with  its  immense  hodies  of  uni- 
form ore,  mined  very  rapidly  with  comparatively  small 
outlay  for  exploration  and  development,  and  the  Port- 
land, with  its  air,i,M-e,i;ate  of  more  or  less  scattered  and  small 
orehodies  re(iuirin^'  for  exploitation  a  large  amount  of 
development  work,  done  to  a  considerahle  extent  at  ran- 
dom. Nevertheless,  1  fmd  that  there  are  certain  opera- 
tions at  the  Portland  that  find  a  parallel  in  the  Tread- 
well,  and  in  these  cases  it  is  worth  noting  how  well  the 
Cripple  Creek  property  will  compare.  Mr.  Kinzie  gives 
the  tonnage  hroken  per  machine  shift  in  underground 
st(3pes  of  the  'rreadwell  at  34»/>-  H^^'  •'•^'■'■'^  ""'  ^^^^^ 
whether  this  is  toimage  removed  from  the  slopes  or  the 
actual  tonnage  hroken,  it  heing  understood  that  in  the 
underground  part  of  the  Treadwcll  mine  ahout  one-half 
of  the  ore  hroken  is  left  in  the  slopes  until  they  are 
worked  through.  In  case  the  tonnage  referred  to  is  the 
actual  hreakage  record  of  th-  machines,  the  performance 
is  almost  identical  in  cost  with  that   in  the  wide  slopes 


Xli  mii    l:C().\t)\lli.  S  Or    M I .\  I .\ G 

at   iIk'   I'lTtlaiiil  tiiiiif.      I  lu-   talilr  IhIhw    !;ui.>  tlic  fnin- 
pari-'  pti 

At  liir  I'' iitlaiul.  Miiall  luacliiiu -,  _•  [  in.,  ()])tTatril  hv 
■  itir  mail  ,ii  $4.00,  arc  ti^od:  at  tlu'  'Iri-aiKMll.  .^,'-iii. 
macliiiH's,  usIhl;  j  15  tmus  a>  imuli  air  at  tlio  >anK'  ])is- 
ton  spi'i'd  as  the  I'orllaiul  tiKU'liiiio.  ami  ■iprrati'l  hy 
two  iiK'n  at  S7.S7  ])iT  (lav. 

I'lTtland.       Trcatlwtll. 

'I'ons  per   tii.icliiiK'   in   all   ^topcs IJ.4  34-9'> 

Tons  in  wiilc  stopi-s i7-7*  ^.M-Q** 

Tons  por  machine  in  drifts 5.,?  9.6 

Tons  piT  foot  Ml  drifts 2.5  7 

Liihor  cost  per  ton  on  ore  broken  in   large  Cents.  Crnti. 

stopes    JJ  6  jj .  5 

Labor  cost  per  ton  broken  in  drifts .  75  Sj 

Labor    cost    per    foot   of    drift    for    machine 

drilliiiK   I  S6  5  ^5 

*  One  man  niaolnncs      '  Tvv.i  nu'n   iii.u'Iunes. 

In  tile  al)i>\c  I'ascs  tiic  comiiari^i  in  i>  not  nnt'a\  urahK 
to  till'  triiijilc  (reck  |irii|Krt\.  ilic  ilcvcli  ipmcin  \\nrk 
l)i.'iiio;  tmu-li  I'lu'apcr  at  rri])pl(.'  (.'reck  than  at  the  Trcail 
well,  hilt  111  this  jiariiciUar  the  cases  arc  not  paralKh 
I'cvclopnRMit  Work  in  the  'Ircaclwcll  means  k.r.i;c  o|)cii- 
iiios  designed  for  the  cxtra'.iion  uf  hi'avv  tonnaL^e.  At 
L'ripple  Cn'ck  tlie  ])riniar\  object  ot'  dcvclopnicnt  work 
is  to  discover  ore,  and  conscqiuntU  the  driftinsj  and 
cross-ciittint^  arc  desit^iu'd  to  I)e  driven  with  tlic  L^rcatest 
speed  and  the  K-ast  ex]Hn.se,  rei;ardless  uf  the  fiiliire 
iitiUtv  of  the  W(ir!<  for  niiniiio  pur])pi>t'S. 

'i'lie  result  of  this  dilYereiice  in  desi,L;n  of  devclopiiient 
Work  shows  in  the  C(ist  of  trainniiiii;,  which  is  <iver  joc. 
per  ton  at  the  i'ortland,  as  a.L^aiiist  a  trille  ovt'r  _^c.  at  tlie 
Treadwell.  Twentv  cents  per  ton  is  ahont  the  Kast  that 
the  traniniin;.;  can  he  done  for  in  (ripple  treek  under 
the  prisiiit  i>lan  in  niininLC  operation-.  It  is  not  ])rac- 
ticahlc  t(j  introdiici'  haiilaoe  s\stem>  nndert;Tound  on  ac- 
count of  tin  -mall,  scaltcrid  oreliodies  c<Minect(.d  by 
crooked  drifts,     li  i.s  hard  to  see  how  anv  utlier  arraiiLTc- 


THE  COST  Ol-  M!.\  l\G 


33fi 


ij 


nil  lit  lliati  the  ]i!i'-ciit  w'iiiM  :il'l'l\  ■  I'lunlnrc.  llu-  dil- 
firiiici'  (if  cii.st  (if  iraiiiiiimL'  Iji'twom  tlir  I'drtlaiiil  iiiiik' 
and  till'  Trtailw!.!!  i>  -titVuuntly  accoiiiiiid  fir  l)y  tlic 
radical  dilTiuiux'  nf  cniiditinns. 

AtiotlK-r  i'\|K'nM-  at  tlu'  I'drtlaixl  is  tiiuhcriiiji,  wliich 
avrraj^td  fnr  ^ix  iimntli^  alinnst  ixaitly  51H-.  per  Imi. 
At  the  Trcadwill  tlii-  i  \ikiim'  i~  prai-tirailv  /ath.  1  Iiis 
is  a  ]i()mt  in  wliu'li  liir  ii'-ai'tici-  at  llu'  i'nrtlaiitl  mine 
!iii<;lil  1)1-  (ipcn  td  critK-i'-ni.  Im-aiisr  ullur  luiiu-s  in  (._  rip- 
ple Creek  succeed  in  (  xtiaeliiiL;  tlnir  nrv  with  alnuist  as 
sirall  exi)eiise  fur  tii:ilier  as  the  Treadwrll.  Xe\'  rtlie- 
less.  as  I  have  atteiiii>ted  t<i  imint  dUt  in  one  nr  t\M) 
fciriuer  cdiiiimniicatidns,  tlu'  pnibleni  is  imt  mie  ui  mere 
Cd.st  per  tdii.  lint  that  df  mimiiL;  the  value  at  the  least 
cost  from  a  lUdfit-makini,'  pi)int  of  view,  ar.d  in  my  judt:- 
meiit  the  timheriiif;  cost  at  the  Portland  is  fully  ju>titie(l 
by  the  conditidiis. 

Af^'ain.  the  Cd^t  df  (irc-sortinf^  at  the  Purtland  is  about 
three  tiiues  as  much  as  that  of  milliii^  aii<l  conceiUratitii; 
at  the  TreaduiU.  Mere  attain  the  ditYereiice  of  C(i>t  is 
justified  hv  a  ditYereiice  of  Cdiiditidiis  sn  obvinus  as 
scarcely  to  merit   discussion. 

'{"he  cost  of  hdistini^j  at  the  Portland  is  about  22c.  per 
ton.  as  a^'ainst  about  iic.  for  the  Ready  lUillion  and 
Alaska  Mexican,  which  handle  about  the  .-.aiiie  tonnage. 
'i'his  difTercnce  is  one  which  should  not  exist,  and  is  ac- 
counted for  larj^el)-  by  the  bad  design  of  almost  all  Crip- 
ple C'reek  hdistiiiLT  plants.  Tlure  is  no  reason  why  ("niiple 
Creek  ores  should  not  bi'  hoisted  b\-  skips  and  diiinjieil 
directly  into  ore-bins,  as  is  done  at  the  Triadwell.  there- 
bv  doini;-  awav  with  the  exjjense  of  toji-trammiiii.;,  which 
in  (ripple  Creek  is  invariably  a  lary;e  item. 

I  am  fi'^'"?^  ^'i*^'  -'I'love  comparisons  larmlv  because 
tluv  are  interesting  in  themselves,  and  partly  to  show 
that  if  the  prd])iT  ditails  were  fjiven,  there  is  a  lejjiti- 
matf  Cdniparison  that  can  be  made  between  mines  e\en 


ti 


3.10 


////:   liCOWMICS  0/    MlMXo 


I't  .i;ri;ii  .i|i|i;iri'iit  ililVvrnn;".-  m  iliai.nlcr.  'I'lu.'  [)iil)li 
lalicMi  ,ii'  t.-i)>i>  waiilil  he  (if  ;iilvantaj;i'  to  ui.iiiy.  prdliahlv 
niii-t.  ininiiijj  coiii]iaiiK  ■>,  lui-aiive  li',  mi  ilmnj^  ilu\ 
U'Uil'l  Ijiin-  ti)  lii;iii  nitain  di  lu-u  ik  U's  in  tlnir  (r,\n 
ni.iiiaj^i  nil  tit.  wliuh  woulil,  m  cuiir.M'  .if  linn',  he  |,.iiii(l(1 
I'lii  1.1  iluiii.  Maii\  I  omiiaiiio  aii'  <lilu<kil  into  lliiiik 
iiil;  iliat  tliiir  Mijii.  1  niti-iitlcii'.>  arr  ^(jod  iiiiiiinj,'  iiiiii, 
>iii:iil\    l)ri.-au-i.'   llu_\    lia\f   l)i.iii   oil   l!u    propirts    a   loiii; 

IlllR'. 

lakrii  III  tlu-  lar^r.  ihc  (liM.-tissinn  of  luiniiij;  costs  v 'U 
iiuii^c  into  that  ])io\oki,il  liy  Mr.  llo(j\ir'>  .irti;-!!.'  .)ii 
iiiiiK'  i.iini|)iu(.iil  and  ore  rcsi.TV(.-s.  .\lo-i  n  .ini><.ti  iit 
niiiK'  iiiaiia,L;LTs  will  probably  ai^rt-i'  uiih  Mr.  Hoover 
that  ibr  luobleni  i>.  to  i  .xtraet  ainl  niarkrt  'In  ■■ntirc 
ili-poMt  i-(jn.siitntin^' a  minr  at  tl'c  L;ri.-aii.'^t  proti;  to  tlu- 
stoi'klKjldir.  '!  luy  will  fnll_\  a,s;r.i'  with  liini  on  llir 
(.■i.-onoin\ .  not  onl^  of  pid\idiii;,'  abnndant  (.-(inipii'  nt  for 
tJR-  rallur  -laidy  working,'  of  vi,->iblc  ore  >upplK-s,  but 
alsii  oi  workiii;;  that  M|nipnu.'nt  to  it.s  itmost  capacits. 
'I  he  con>idi.ration  of  mkIi  subjects  i.-  t,ic  consideration 
of  iiiiniii';  co.st-  III  ;lu'  widv.^t  ^ei,>e.  ''he  problem  of 
deciding,'  iii)on  the  be>t  iiiethuds,  tile  jiroijcr  scale  of  op- 
erations :ind  (he  iiuxt  i/.-.vfruWt'  cost  to  be  aimed  at,  is 
one  biu;  eiioni^h  I'or  the  best  business  intellii.;e!ice  a  niiii- 
iiij;  engineer  can  mtistir.  Unfortunately,  tu(j  maiiv 
engineers  lonline  their  attention  too  niucii  to  technical 
subjects,  -iiid  the  ow  uer.s  of  la'i^e  enter|)ri.-is  ofien  find 
it  neces-ar\  to  leave  them  out  of  con>ideration  in  tile 
decision  of  the  broader  as|)ecls  of  the  bu.-iness. 

Ability  to  see  ihiiins  in  their  proper  [)reipoitions  and 
to  lay  strcjiij;  hold  of  the  essential  features  of  an  enter- 
prise are  more  vital  to  the  .-uccess  of  a  manager  than  all 
other  iiu.ililii-s  coinbiiud,  and  are  more  neces>ar\  at  the 
begni'Mnj;  (jf  an  enterprise  than  at  any  other  tune.  !t 
is,  indeed,  rare  that  a  s^^ood  mine  i>  abxilnteh  .vpuiled, 
but  nothing  is  nie)re  coiiimon.  than  to  ^ee  mines  worked 


Till-:  COST  01-  MIMXG 


387 


mil  iiiicKr  siu/li  liaiiilir;ii)>  >l  1ki  1  'iiaiKimiiu'iit  tliat  tlicv 
fall  I  iioriii.  iii-l\  ^licirl  of  piixlncinjr  tluir  jii^t  |)ri]tlt', 
1  liis  had  ...a^  imiit  is  just  as  ajjt  to  !)(.■  tlu'  ri>iilt  of 
soi.:i.'  mistake  in  j;i'iKral  i)riiicipK  s,  siicli  as  iiutliixls  of 
ininiii^'.  ilfsij^ii  and  scope  nf  |)1;';  ',  as  from  failure-  to 
work  out  >  ,i.r\day  (ktails.  Mistakis  diii  to  failure  to 
eoiniiriluMid  tile  .structure  and  capahililf's  of  the  ore- 
liodies  ari'  extremely  common,  and  1  have  seen  mines 
Ijiouyht  to  the  verj,'e  of  mill  hy  such  mistakes. 

It  is  only  when  the  salient  features  of  an  cntirprise 
Iia\e  hem  uoikid  out  and  decided  on.  thai  one  is  justi- 
lied  in  ti,i;nrin^  on  the  details  of  cost.  h"or  instance,  one 
can  scarct'ly  estimate  how  much  't  will  co>t  to  hoist  a 
Ion  (jf  rock  until  he  knows  what  kind  of  an  eiif^Miie  he 
is  goinj;  to  have,  as  well  ;is  the  aj)])lianccs  used  in  load- 
ing and  dumijinf,',  etc.  If  his  tonnage  is  small  and  uii- 
:ertain,  he  will  ])rohal)ly  prefer  not  to  put  in  skips  w'th 
underground  loadini^iiockits.  hut  will  use  li^-jit  etiLjines. 
small  cages  or  buckets.  Tin  rehy  he  will  save  a  portion 
of  lii.s  ilant  inv(  *ment  at  the  expense  of  a  higher  cost 
in  daily  manipulation.  If  you  are  able  to  hoist  onlv  40 
Ions  a  (lay,  yon  will  still  be  compelled  to  employ  two 
engineers  at  $4  a  <lay,  and  \our  hoisting  will  ct)st  ^oc.  a 
ton  for  engineers'  Labor  .'done.  Circumstr  ■  ccs  niav  be 
such  that  a  hoisting  cost  of  4i)c  a  t(Mi  wid  be  just  as 
good  practice  at  one  place  as  4c.  ;i  ton  at  a.:  >thei  ])lace. 
The  thoroughly  com]>itent  (.iigineer  will  see  the  folK  of 
working  on  nnjnstiliahle  economies.  If  ;i  man  really  ex- 
pects to  hoist  only  io,ooo  tons  altogether,  he  will  he  a 
better  engineer  to  get  all  that  rock  out  with  a  windlass 
at  $1  a  ton  than  to  buy  a  ,Sio,<xx)  hoist  in  i-der  to  gtt  it 
tip  for  IOC,  a  ton. 

The  same  kind  of  reasoning  applies,  in  mauv  wavs,  to 
a  variety  of  items  that  make  up  mining  costs.  I'or  ex- 
ample, a  man  may  he  doing  excellent  drifting  ' -..i  he 
may  do  so  much  of  it  that  it  may  appear  as  a  large  item 


338 


77//:   1:1  0.\<.>. MIL'S  Ul'   MIXIW: 


.1  his  cost  nl  nrc.  \  n\  likily  Iv.'  mii^lil  :n  ]\\\\w  praise 
fur  his  t;<)0(i  ih-iftint;,  iiisi.  u!  ul  lilanic  for  hi-  Inj^h  cost 
per  toll. 

It  sums  to  inc.  therefore,  tliat  the  costs  that  affunl 
nuist  iiitcresiini;  coniiiansoiis  ami  are  most  easy  to  nh 
tain,  are  ihnse  whicli  apply  to  sncli  tlniiLjs  as  driftini.;. 
shaft-sinkint;.  s!ioveliii<j.  niacliiiie  ilrilling.  -.'tc..  etc.;  in 
fact,  just  Mieh  detaiU  as  .Mr,  Kiii/ie  t^ives  in  his  pa])e,- 
on  the  Treadwell,  When  costs  on  these  tliint;;s  are  cor 
rectly  stated,  with  inforniaiion  re,ii;ardin.u;  the  condition- 
■  ■1  wnrkiiiL^  (such  as  ventilation,  water,  kind  of  rock, 
manner  and  method  of  \vi>rkini,0,  they  hecoine  valuahU. 
It  woidd  probably  be  aina/inn;  to  see  the  difference 
between  n!ine>  in  the  .-ame  di'  ict.  workinjr  under  iden- 
tical conditidiis.  These  Cdst  ,  tlierifiire.  and  not  the 
total  costs,  are  those  tl'.it  nii.t;Iit  l)e  L,dveii  publicity,  witli- 
oii,  harm  t"  the  mining';  companies,  and  iimre  olten  to 
their  t;reat  advantage. 

J.    R.    FlNL.W, 

Colorado  Springs,  Feb.    nj,   1905. 


MINE   RESFRVES 

(March    2,     1905.) 

The  Editor: 

Siu— When  1  wrote  vdu,  early  last  year,  asking  for 
an  expression  uf  0()iiii()n  as  to  the  wisdom  of  the  prac- 
tice of  keeping  a  reserve  (jf  gold  or  I)ullion  at  a  mine,  it 
was  because  I  had  a  premonition  that  the  question 
would  have  to  be  settled  in  Western  Australia  soonc-  or 
later.  The  Boulder  Perseverance  scandal  has  brought 
the  matter  to  a  head  in  that  State,  just  as  the  matter 
had  been  fought  out  earlier  in  the  smaller  companies  in 
Victoria.  When  writing  to  \ou,  the  point  that  was  put 
was  that  the  practice  was  bad,  inherently  bad,  inasmuch 
as  it  gave  great  opening  for  fraud.  Nothing  has  oc- 
curred to  shake  that  opinion. 

If  the  evi<lcnce  of  the  leadmg  Kalgoorlie  mine  man- 
agers, given  before  the  IJoulder  Perseverance  Commis- 
sion, in  favor  of  the  retaining  of  a  reserve  at  the  mine, 
is  analyzed,  it  will  be  found  that  the  chief  reason  ad- 
duced in  support  is  that  the  share  market  must  be  kept 
level  by  having  level  yields.  The  members  of  the  royal 
commission  were  so  impressed  by  this  contention  that 
in  their  finding  they  adopt  the  views  put  forward  by 
the  mine  managers.  Still,  is  it  in  any  sense  the  duty 
of  the  mine  manager  to  consider  the  share  mai  et?  If 
he  does,  is  there  not  always  the  risk  that  he  will  take  a 
hand  in  it?  With  men  receiving  the  regal  salaries  earned 
by  the  managers  of  the  big  Kalgoorlie  mines,  there 
ought  not  to  be  any  temptation  to  go  astray  by  using 
the  knowledge  they  obtain  in  their  official  position  to 
speculate  in  their  company's  shares.  Hut  the  history  of 
Kalgoorlie  mining  is  such  as  to  enforce  the  conviction 
that,  not  only  liave  wrong  estimates  of  the  value  of  the 
ore  been  given,  but  also  that  bullion  reserves  have  been 
used  \o  assist  in  market  operations.     With  smaller  com- 


340 


THE  liCOXOMICS  or  MINIXG 


panics,  wlurf  salaries  arc  low,  how  imicli  greater  must 
be  tile  temi)tati()n  to  iiieii  to  try  to  make  themselves 
financially  secure  by  manipulating  .tlic  bullion  reserve. 
But  does  the  existence  of  a  gold  reserve  protect  shares 
from  tUicluations?  \ictoriaii  experience  says  No.  The 
grade  of  the  ore  falls  off  and  the  yield  is  kept  up  by  the 
assistance  of  the  golit  resirve.  Xo  one,  ostensibly, 
knows  of  the  true  slate  of  affairs,  except  t!ie  manager 
and  the  directors — when  the  latter  arc  kept  posted  as  to 
the  reserve — or  the  manager  alone,  and  perhaps  one  of 
his  trusted  officials.  Yet  the  market  soon  shows  signs 
that  something  is  wrong,  although  the  yields  have  kept 
up  to  tiuir  average.  Some  one  invariably  learns  of  the 
clianged  circumsiances  of  the  property,  and  lie  gets  rich 
at  the  expense  of  others.  Is  this  good  for  the  industry? 
It  may  he  said  that  a  study  of  the  assay  plans  will  co'i- 
vey  the  fact  of  the  falling  oft  in  the  grade  of  ore.  But 
we  in  \  ictoria  do  not  have  assay  plans,  and  even  if  wc 
had,  the  ordiniiry  shareholder,  like  the  mine  manager, 
hopes  that  pay-dirt  n.ay  again  Itc  entered.  As  it  is.  how- 
ever, the  practice  of  keeping  gold  reserves  has  been 
practically  abandoned  here.  And  it  is  an  answer  to 
those  who  think  tliat  stocks  would  depreciate  if  yields 
were  to  fluctuate,  that  some  of  the  most  stable  shares  in 
the  bullion  market  are  those  where  no  gold  reserve  is 
maintained.  Shareholders  are  educated  to  know  that 
thev  must  expect  variations  in  yield.  All  they  want  to 
l)e  told  is,  that  the  mine  is  opened  up  well  ahead  of  the 
jiicks,  and  that  the  average  value  of  the  ihrt  is  main- 
tained.   Then  they  are  not  alarmed  by  poo*-  patches. 

One  point  touched  upon  in  the  evidence  given  ijefore 
the  royal  commission  deserves  attention.  Managers 
stateil  th.it  thev  wduhl  not  tell  a  .^harebolder  the  amount 
nf  the  reserve  if  he  made  an  inc)ulry  on  the  point.  The 
\ietniiaii  L  ompanies  .\ct  provides  that  in  a  mif.ing 
company  a  shareholder  or  a  creditor  can  demand,  and 


MIXfi  RliSliRn-lS 


341 


must  be  supplied  witli,  tlirt'c  iiKintlis'  accounts  from  tin." 
hoard.  Just  sec  the  position  tlie  directtjrs  would  be  in  if. 
while  telling  tiiat  the  debts  were  S(j  nuich  and  the  assets 
so  much,  they  oniitttd  to  state  that  there  were  so  many 
ounces  of  i^old  held  in  reserve.  Should  the  shareholder 
sell  on  the  statement  and  tlie  scrip  rise,  he  could  recover 
against  them  for  furnishing  a  false  return.  If  he  held, 
and  shares  declined,  he  would  still  be  in  tlie  same  strong 
position.  It  is  the  dut;.  oi  the  directors  to  know  if  a 
gold  reserve  exi>ts,  and  still  more  is  i;  tlieir  dntv  to 
know  how  it  is  used.  W'itl:  this  information  in  their 
haTids,  they  have  no  right  to  refuse  to  tell  a  partner- 
that  is,  a  fellow  shareholder — how  the  reserve  stands. 

( )nly  under  certain  cmditions  can  a  gold  reserve 
at  a  mine  owned  by  a  company  be  justified,  (i)  T!iat  it 
shall  be  ke])t  with  the  fidl  knowledge  and  consent  of  the 
shareholders.  (2)  That  every  monthlv  yield  shall  be  re- 
corded truthfully — say,  10.000  tons  for  S,25o  nz.;  taken 
from  reserve.  1.750  oz.;  total  return.  10,000  oz.,  if  the 
average  to  be  kept  up  is  an  ounce.  (3)  That  the  extent 
of  the  reserve  then  started  shall  be  disclosed;  and  (4) 
that  every  month  the  uithdrawais  from  it,  or  the  addi- 
tions to  it,  shall  be  stated.  Then  the  nrdinary  shareholder 
will  know  lunv  he  stands,  and  as  he  is  the  backbone  of 
the  industry,  it  is  to  everyone's  interest  that  he  shall  not 
he  deceived,  and  so  be  led  to  withdraw  his  support  from 

''■  F.   H    I5ATHUKST. 

Melbourne,  \'ictoria.  Jan.  21.  1905. 


THE  COST  OF  MINING 

(.Marcn    g,    iy'*5-t 

riic  Editor: 

SiK — Mr.  liipalls'  tiiiuly  article  on  the  above  subject 
calls  attention,  not  only  to  the  desiral)ility  of  uniforni 
methods  of  keei)iii,L,'^  mine  costs,  but  also  to  the  publica- 
tion of  itemized  statements  of  costs.  On  the  latter  point 
tluro  is  much  ditTerence  of  opinion. 

There  should  be  nu  difference  of  opinion  regarding 
which  enters  into  tlie  cost  oi  mining.  Nothing  short  of 
the  total  cost  can  be  correct,  and  anything  less  is,  to  say 
the  least,  misleading.  No  n'.atter  how  the  costs  may  be 
divided  up  or  distributed,  the  net  profit  per  ton  deducted 
from  the  market  value  equals  the  cost  of  mining,  or,  as 
Mr.  Ingalls  puts  it,  X  —  Y  =  A. 

The  tabulated  costs  quoted  by  Mr.  Ingalls,  and  ad- 
mitted imperfect,  are  simply  ex  parte  statements.  No 
charge  is  shown  for  maintenance  of  plant,  taxes,  insur- 
ance and  many  other  items  of  substantial  expense  in- 
separable from  ordinary  mining  operations. 

Here  is  a  more  complete  statement,  taken  from  the 
balance  sheet  of  another  Cripple  Creek  property  (Mining 
Reporter,  December  8,  1904  j.  and  which,  1  presume,  rej)- 
resents   English  methutls ; 

Ccst  for   Year  Ending  June  jo,   1904. 

RlockipR  out   ore.  etc $4-1.31 

Ore  breakiiii; 5, 182 

I  inihcrinj,'    0744 

riimpiiig    o.y.i.i 

Hoisting  and  tramming I-4*>9 

drc  scirliMj;  am!   loading o.'X)8 

(kMieral    lighting o.  II2 

.Surveying    o.oXo 

Mine    saiiipliiiK O.oCK) 

W'aiies  of   foreman,  etc O.265 

Watchman  o.  134 

$13.7-34" 


Tim  COST  OF  MIXIXG  343 

R(•||,■ll^^  and  iinprovcincnts  Id  huiIdiiiKs  atid  plants $o  .280 

Sliippiii>;  and  M'llin^  (irf.  --anipliMK  and  assaying n   i7i».< 

Salaries  of  i-nnsnltniK  fiiginc-cr  and  manaj^cr o  S<^_>3 

Salaries  cd  clerks on.^',? 

Auditing  fees  and  -xpenses "  0J44 

Assay    plans o  o,?(>4 

Travi'luiH    expenses n.0050 

I'.Nploitation  expenses (i  0770 

Insurance    o.  14(14 

Taxes    (less   adjustment) <>   I'xM 

Compensation,  etc.,  cage  accidents o  J50J 

Strike  expenses 0.0S75 

l.e^al    expenses o.nj$j 

Loss   on   cottages o  ni  10 

Miscellaneous  o.07.?o 

Total     $J..?io 

Freight  and  Ire.alnient  on  4,1,758  ton*; $7-74.< 

London  otVice  expenses,  including  $5,178.80  for  a  special 

report  on   the  mine O.51J 

Total  cost $24,290 

A  gddd  sy.steni  of  co.st  keeping^,  not  ncccs.sarily  an 
elaborate  one,  is  an  essential  requirement  of  any  well- 
managed  mine,  nevertheless  it  is  very  often,  throngh 
faulty  methods  or  tediously  minute  classifications,  a  mat- 
ter of  eonsiderahle  expe-.se.  When  the  ordinary  shift 
bosses  arc  overloaded  with  cost  keeping  or  cost  dis- 
tribution methods  the  general  work  suffers,  and  the  cost 
of  breaking  rock  goes  up,  as  it  were,  in  an  eflfort  to  keep 
it  down.  In  other  words,  while  the  foremen  or  bosses 
are  endeavoring^  to  find  out  how  many  nails,  caps  and 
candles  are  consumed  in  breaking  a  ton  of  rock  in  one 
slope,  the  men  may  be  idling  in  another. 

The  minute  elaboration  of  mine  costs  is  largely  acad- 
emic— the  result,  perhaps,  of  autocratic  mine  manage- 
ment with  lledgelings  itistead.  of  experienced  birds  in 
charge  of  the  operations.  The  autocrat,  seated  in  his 
nt^cc  chair  at  some  financial  center,  in  his  endeavor  to 
direct  the  operation  of  some  score  or  more  mines,  often 
,  attaches  undue  importance  to  mere  items  of  cost  (which 
are  seldom  strictly  comparable   for  any  two  mines')   and 


344 


rill-   ECOXOMICS  (>/••  MIMXG 


pays  litilc  if  any  aitcnti.  n  w  \hv  practical  minin.i,'  ability 
of  those  ill  cliaij;c  ul  the  npcratums.  Should  not  the 
ability  to  discover  ore.  or  even  not  to  lose  it,  when 
discovered,  rank  fully  as  hi,L,h  as  mere  cost  of  prodr.-- 
tion?  'Idle  most  elaborate  cost  system  ever  devised  u.d 
never  successfully  displace  mining  skill  acfjuired  by 
years  of  close,  intelligent  observation  and  experience 
in  actual  mining  work.  I  have  known  mines  where  the 
cost  of  producing  and  milling  or  marketing  a  ton  of 
ore  was  steadily  lowered  by  one  expedient  (jr  another; 
but  somehow,  before  the  total  cost  readied  a  miiuis 
quantity  profits  vanished,  the  stockholders  kicked,  or 
something  else  happened,  a  strike,  like  as  nut,  and  the 
mine  was  eventually  leased,  with  results  entirely  satis- 
factory to  the  stockholders. 

We  have,  here  in  Colorado,  scores  of  cases  where 
lessees  (practical  and  experienced  miners)  have  taken  u\) 
unprofitable  and  practically  abandoned  mines,  made 
them  pay  handsomely,  and  turned  them  over  at  the 
ex[)iration  of  their  leases  in  condition  where  even  the 
Rodomont  autocrat  could  for  some  time  work  them 
profitably  from  his  observation  point,  perhaps  tliousands 
of  miles  distant  from  the  field  of  operation.  Xovv, 
lessees  do  not  depend  on  any  vlaboration  of  mining  costs 
to  secure  these  results,  but  rely  almost  entirelv  on  their 
ability  as  miners  and  on  their  practical  experience,  which 
has  taught  them  that  mining  is  the  an  of  inakiiii^  iiioiwx 
from  ore  deposits;  that  the  co>t  per  ton  is  only  one 
factor;  and  that  bi caking  the  ore  as  free  as  possible 
from  waste,  and  properly  sorting  it.  is  often  of  more  im- 
portance, for  the  reason  that,  while  it  increases  the  cost 
of  raising  a  ton  of  ore,  it  also  increases  the  net  profit  of 
the  operation,  which  should  be  the  oljjective  point  in 
mining.  Therefore,  I  hold,  the  successful  miner  in  anv 
given  mine  is  he  zclio  returns  the  lor.;est  f^ereeutcii^e  of 
profit  from   the  gross  z'aliie  of  the  ore,   not   necessarily 


THE  COST  OF  MIMXG 


343 


the  one  who  can  shuw  ilic  lnwi-st  mininfj  cost.  To  reach 
this  (lesira'le  condiiinn,  ihe  cost  ni  minms^  or  snieltin<; 
must  he  sti.ilii'd,  tn<;ciher  with  the  cost  of  the  actual  niin- 
in<x  and  sorting:  or  drcssini;-  of  the  ore;  hence  these 
charf:;cs,  very  jiroperly  ijrouped  separatel)  in  the  itemized 
costs,  are  hrouL^ht  toL^ellier  lo  form  ihe  toi.d  mininjj;  cost 
as  previoush    defined. 

I  favor  a  simple  s\>tem  of  cost  keepiny^.  where  the  dis- 
tnt)ution  of  sU]iplies,  etc..  is  made  (hreci  from  the  mine 
store,  on  the  orders  of  the  superiiUeiident  or  shift  bosses. 
and  they  are  cliar.L;ed  at  oiue  to  tiie  particuhir  phice  or 
work  indie  ;ted. 

The  f^eniTal  suhihvisions  of  mine  costs  that  su!;i,'est 
themselves  are:  (I)  Wiimin^  ( hlockini;:  out  ore).  (2) 
stopin,cf  the  ore,  ( .^ )  dressintj  or  luilliui^f  or  smelting  the 
ore,  the  sum  of  these  hein;,,'  the  entire  cost  of  producin^j 
and  disfiosin.q'  of  one  ton  of  ore,  provided  alu.i\s.  the 
amount  won  durinij  the  period  under  review  e(iuals  the 
amount  of  ore  stoped,  otherwise  corrections  mu-t  he 
made  for  increased  or  ilecreased  ore  reserves;  or,  at  least, 
the  condition  of  the  ore  reserves  should  he  clearlv  stated. 
The  averaj,'e  stockholder  is  satisfied  with  the  totals  as 
above,  together  with  the  value  of  the  ore  and  profit  per 
ton,  or  the  usual  balance  slieet  and  profit  and  loss  state- 
ment. Then  why  bewilder  him  with  itemized  statements 
of  costs?  I'seful  and  indispensable  thourrh  they  mav  be 
to  the  management,  tliey  are  as  invariably  useless  to 
stockholders. 

The  matter  of  piililishing  itemized  mining  costs  is  one 
that  mining  companies  do  not.  as  a  rule.  apprn\c.  As 
the  president  of  a  large  conipnn\-  once  said  to  me.  "ft  is 
our  private  business,  and  why  should  we  give  it  to  the 
world  to  satisfy  the  curious,  or  help  educate  \oiing  min- 
ing engineers  who  have  not  had  jiractical  experience 
along  those  lines,  or  to  furnish  ammunition  for  the  stock- 
holders   to    make    erroneous    comparisons    between    two 


346  TUL.  LCUXOMICS  01-  MISISC, 

mines  of  piihaps  vci>  ditfcrciit  type?"  ThrDUKlinut  the 
Rocky  Miiiiiitain  rci^icm  tlu'  ;ivcTaj;c  mining  companies 
have  <lealiiif,'s  with  tlie  railways  and  ^melters  in  marketin^j 
tlieir  ores,  and,  ri.t^htly  or  wrongly,  very  often  heheve  that 
these  corporations  are  anxious  to  secure  as  ln^h  a  taniT 
as  thev  lielieve  the  ore  will  stand;  antl  so,  in  places  :is 
far  apart  as  I'.ritish  Columhia  and  the  San  Juan,  and 
once  in  (  )ld  Mexico,  I  have  at  various  times  heard  niine- 
(.wners  say  soniethini;  like  this:  "Why  should  we  puh- 
lish  the  itemized  costs  of  producing  a  ton  of  marketahlc 
nre?  Neither  the  railroads  nor  the  smelters  puhlish 
itemized  costs  for  liaulius  or  for  smelting  a  ton  of  ore. 
and,  furthermore,  we  do  not  iR'lieve  that  it  costs  the  rail- 
wav  corjxirations  any  more  to  haul  a  ton  of  $50  ore  than 
it  would  to  move  a  ton  of  $15  ore  over  the  same  distance, 
and  yet  the  charfje  is  often  douhle.  And  so  with  the 
smelters,  the  charges  on  some  ores  are  based  simply  on 
their  precious  metal  value." 

.\  full  discussion  of  the  various  methods  of  classifyinjj 
mine  costs  mav.  and  1  hope  will,  result  in  the  gradual 
adoption  of  a  uniform  system,  from  which  tentative  com- 
parisons can  readilv  he  made  between  mines  of  similar 
type.  etc. ;  but  under  the  present  economic  conditions  that 
obtain  in  the  West,  the  c;rcat  majority  of  mining  com- 
panies will,  as  now,  refrain  from  publishing  itemized 
statements  of  costs.  Philip  Arc.m.l. 

Depver,  December  12,  1904. 


THE   COST  OF  MINING 


(Mar 


J}.    11105) 


The  Editor: 

Siu — I'lu'  sriipf  (if  such  a  disi-ussiou  is  tuci-ssarily 
wide,  liut  ill  tlic  fiillnw  iiit,'  I  shall  t.  nfinc  myself  to  clt- 
laiii  fuiiilaiiKiitals,  ratlur  than  to  a  cniiijjarison  of  ex- 
amples. An  'iiti-lli^eiU  stiuly  of  mining;  costs  must  he 
prcccdcil  hy  a  analysis  of  the  various  items  .i;"'"R  t" 
make  r.])  the  total,  in  order  to  obtain  a  sej^rcfjation  that 
shall  he  lofjical  and  useful.  Such  items  as  Mr.  Int;;alls 
j^ives  m  his  lirief  tabulation  are  certainly  useful,  but  they 
do  not  \irl(l  the  whole,  or  even  the  larger  part,  of  the 
value  tiiat  the  tifjures  in  themselves  contain.  This,  I  un- 
derstand, Mr.  lnj:;alls  recoj^nizcs,  and  1  have  no  doubt 
that  he  will  fully  in<lorse  tlie  statement  that  a  classifica- 
tion in  this  form  may  conceal  cietails  of  the  first  impor- 
tance to  the  engineer. 

In  the  first  place,  it  is  ])ertinent  to  infpn're.  What  are 
the  uses  to  which  accountiufj;  lends  itself?  There  is  the 
obvious  use  of  su])plyintj  a  business  need  ;  of  fjivinp  to 
the  stockholders,  present  and  pros])ective.  a  reliable  idea 
of  what  the  property  can  do  in  the  way  of  profits;  and. 
in  general,  how  it  is  managed,  though  it  must  be  admitted 
that  comparisons  of  cost  in  this  way  may  be  misleading. 
In  fact,  they  are  chiefly  valuable  in  raising  iii'-Hiirics  that 
only  a  more  logical  segregation  can  answer.  These  com- 
mercial accounts  will  naturally  fall  under  obvious  and 
simple  heads,  presenting  what  would  be,  from  tlie  engi- 
neer's point  of  view,  mere  summaries  of  the  more  ex- 
tended subdivisions  which  are  technically  tisefid  :  and  it  is 
the  logical  basis  for  these  technical  accomits  which  par- 
ticularly concerns  this  discussion. 

This  basis  mav  be  simply  a  cutting  of  expenditure  into 
small  items,  as  is  the  case  in  Mr.  Ingalls'  table.  Fre- 
([uently  this  is  all  that  is  done,  ant!  the  valuable  intor- 


348 


////-  i:CO.\UMUS  Ol'  MIMXG 


iiiatMii  alhmk"!  i-  fnii-.i(liTi(l  tin-  end  dt  tlu-  !)u>mcss. 
r.ui  iluTc  is  mure  to  Ik  -aiiui  ■.  an  these  tij,^iircs  diiiclly 
KHc:  and.  witli  tlii>  f.,,  t  in  situ,  it  i-  unrtli  ci  n>idcrint; 
wliat  t  i.s  iMi  wliicli  till'  ciii^incrr  really  lias  use.  As 
managfr.  he  ui.-hes  in  i-Miiipar>  his  acenunts.  ni<  nth  hy 
niniiih  .111.1  \ear  hy  _\ ear,  lioiii  with  theni.sclvcs  and  al.-,o 
with  thi  >e  ni  dtl.^r  n:nie>.  as  a  i  heek  npnn  operation  and 
for  siif;^'esti(  n  ni  iinproveiiient  :  >m  far  a>  this  .i^oes,  tlie 
items,  as  ^riv  n  lurewith,  answer  fairly,  lint  he  uislus 
also  to  know  hou  ,(.sts  will  k'  altered  hy  ehan^'e  i::  ton- 
naf,'e.  1  hi>  i-  a  matter  of  inipnrtanee.  fur  the  mine  nian- 
a!,aT  a.s  well  ,is  t,ir  the  examinrit;  eii.^ineer;  it  is  imper- 
fi.  tly  j,Mven  1>\  muI:  a  -ystetn,  e.xeept  for  those  divi-ions 
which  are  direct  fnncti.ms  of  tonii  tije.  Som-  aceonnts 
are  not  fiuu-tii  ik  of  tonnaL;'  at  all.  -ueli  as  superinten- 
deii-e,  ottiee-  and  tax.  -:  Mtlurs  are  ndt  pro[jortional  fiine- 
lions,  sncli  a<  pnmpinj,'.  h.oistinj;;  there  is  a  long  list  of 
snch  ace'iunts. 

1  hen  lioth  the  niana.q:er  and  the  examining  engineer 
need  a  di\i-ion:  this  -'i.iuld  rec  gni/<:  aoeoinils:  (A) 
that  are  iiidep<  lulent  m1,  and  (  1',  )  those  that  are  dependent 
on.  tonn;i-e  ;  that  i>.  (  .\  I  w'lere  the  total-  for  a  period 
do  not  alter  with  variation  in  tonnage,  and  (LI)  where 
they  do  >o  alter.  I  uriher,  under  (  .\  )  there  are  some 
(Ai)  accounts  that  are  practically  con>'ant,  such  a.s 
superintendence  and  tuanageinent.  and  others  (Aj)  that, 
while  uideiK-ndetit  of  •onnage,  are  variahle.  such  as  those 
thai  alter  with  chan,i;e  of  sea-"n_  travehn.g  e.x])cnse,  etc. 
In  close  estimates  it  will  help  to  have  these  known  sep- 
arately. (11)  also  has  two  natural  suhdivisions :  (i!i) 
where  tot,  ,  ,ire  vir'.n.dly  direci  functions  of  tonnage, 
and  (112)  where  totals  are  indirect  functions  of  tonnage; 
that  is,  they  alter  with  tonnage,  hut  not  proportionatelv. 
i-'.xamples  i.f  (111)  arc  "stoping"  and  ■tramming';  (B2") 
includes  development,  which  varies  according  to  condi- 
tions of  mill,    and    oreiuHlies ;  also  certain  repairs. 


w 


THE  COST  or  Ml  \ ISC, 


%\'.\ 


TJicro  is  am  villi  r  l.irpe  class  of  accuuiits.  iiaiin-ly.  those 
aildiiions  to  pi.uil,  f(|nipmciit  ari'I  ripaii-  that  will  tiiakf.' 
thcni--olvcs  flit  (uiT  (■.xtcti'K'il  piTJi-ils;  in  ntluT  words, 
'capital  t'X|Hiiilii  n  -.'  Thf-o  -hniilil  Ik-  ri'liiiiK-d  hy 
•  harj^i's  against  npiTaiiiii;  expenses  over  varying;  periods 
Whatever  niav  he  the  liusituss  policy  of  chari^iti;,,'  thesi 
nfT,  there  can  he  -iiuill  i|iustioii  that  the  accurate  logical 
treatment  for  the  en,L;ineer  i-;  tn  coiisiiler  theni  as  a  part 
of  his  operatinijf  expense,  month  hy  month.  Xo  estimate 
of  cost  wliich  nnt^hlv  assnmes  that  such  txpcnditures 
will  e(inalize  them-elves  will  i)e  fair;  if  they  are  not  put 
into  'wnrkinp  co>t'  there  is  always  the  dan^'er  that  they 
will  he  n\erl'^)keil  entirely  in  makini:^  estimates.  A 
division  of  expenditure  on  these  lines  can  l)e  carried  out 
to  any  extent  of  itemization,  and  will  ^ive  a  system  of 
technical  accounts  that  w  dl  furnish  all  the  data  desired. 

In  ^tudyinp  the  prMhiem  of  a  proper  segregation,  it 
will  he  seen  that  none  of  the  adv.uitapes  of  the  more 
coiiimon  systems  oi  plain  snhdivision  will  he  lost :  the 
basis  IS  applicahle  to  the  smallest  as  well  as  to  the  largest 
mines;  the  degree  of  snhdivision  can  he  extended,  as 
easilv  as  in  an\  other  systein,  to  any  degree  of  minute- 
ness demanded. 

In  the  foregoing  T  have  aimed  to  outline  a  familiar 
principle  ;  it  is  so  well  estahlishcd  that  a  large  part  of  the 
recent  discussion  in  this  Jot'RN.M,  on  'Mine  Equipment 
and  Ore  Reser\-es'  hinges  upon  it.  TTowever,  though  the 
principle  is  not  new  in  practice,  so  far  as  I  know,  hefore 
the  fliscussion  referred  to.  it  had  not  been  hrought  out  in 

r'"'"*-  R.  Gii.M.vN  Brown. 

.'^an  Francisco,  March  i,  1905. 


TUt  COST  OF   ivVaING 

The  Ldtior: 

Sjk_1„  proposing;  tlii>  miruatr  sul.ici-t.  Mr  lu^M^ 
has  pavi'tl  tlic  wmv  h<r  .m  ;ilni"st  iinliiiiiU.l  iiitiTiluinm 
of  i(lca>  upon  ar,  imi"irtani,  l)Ut  lu-l.vtol.  l.raiidi  ni  mm- 
iIlJ,^  .\>  Mr.  Imlas  lias  s,,  uill  put  il,  '■Hie  p'oblciu  nf 
tk'cidmt;  uih.ii  iIk-  l.c-t  nu't'uids,  tlu'  proper  scale  of  opera 
tions  aiul  the  ni.-l  (k-irahle  working  cost  to  he  iiiiied  at. 
is  one  hiir  eii.iUL;h  for  the  he-^t  business  intelh^^enei  that  a 
mininjj:  en:j;;iieer  can  iinister. 

The  Mihjeet  involves  a  phase  of  mining'  coneirnin^ 
which  not  aloiu  the  newly  t^radiiateil  mining'  eni;iiieer 
lacks  knowledge:  it  inclndes  pn.hleni>  and  coiiditioio 
whicli  many  enL;ineers  of  loiij,'  experience  have  not  had 
the  K"'"l  fortune  to  incounler.  To  obtain  reliable  a: d 
well  sej;re«atetl  ti^ures  pertaining'  to  woikiu^'  costs  from 
the  avera,^e  mine,  this  is  oue  of  the  most  ditVicult  tasks 
which  the  en^Miuer  can  undertake;  unlike  the  other  fac- 
tors tliat  contribute  to  mine  valuation,  the  necessary  data 
can  be  obtained  only  from  written  records. 

I  cannot  miderstand  why  so  many  mininp;  companies 
continue  to  practice  such  wasteful  brevity.  It  is  a  fact 
that,  in  most  cases  where  such  method  is  practiced,  not 
only  the  officers  of  the  company,  but  their  servants  also, 
unconsciously  fail  in  possessing  and  preserving  an  ade- 
quate knowledge  of  their  true  conditions  In  estimating 
the  value  of  a  mine  it  i.^  impossible  to  separate  this  fac- 
tor of  'working  cost';  nevertheless,  we  often  read  mining 
reports  in  which  the  author  may  have  accurately  applied 
every  known  principle  in  estimating  the  ore  reserves,  and 
yet,  for  want  of  projier  data,  he  may  decline  to  hazard  an 
estimate  of  the  working  costs.  The  working  cost  is  to 
mine  valuation,  what  width  is  to  the  assay-value  of  a 
givin  vein. 


) 

itii 


T'li:  COST  Oh   V/\7V(7  ",",1 

It  (l(.<s  not  appt'.ir  Im  I.r  a  .lirtuult  ta-k  m  standardi/i- 
ilif  Iira<lii!i,'s  t(.  1k'  iiM.l  in  till-  tnial  classifuation  ..f  inin- 
ini,'  rests,  sin-li  as  niniii.i^',  tra.,i|-.iint,'.  ln.i^titiL,'.  surlini;. 
cnisliint:.  ai,.l  s(.  on.  foll.iwin^;  thr  (lilTcnni  prm-issi'S 
n->.l  in  t..r  trratinr.it  of  tlic  (  re;  I'nt  to  settle  iii"'"  a  nni- 
f,,rin  tnelliod  of  setjre.sjiatinf;  the  itenis  eontnhntin-  to 
tlusf  aivonnts.  and  a  eorrect  distrilmfinn  of  tlie  nio,ie\. 
(■x(H'ii(le(l.  tills  is  a  snlijrct  which  sliotiid  elicit  iiiforma- 
tidti  Imtl-  interestinir  and  instnictivc.  l"or.  no  matter 
wh.it  the  svstein  '>i  time  k.'eiiinL,'  mav  he  (wlthii,  ecnnninic 
limits  K  there  are  certain  innnevs  which  must  he  (hs- 
trilniled  uithont   the  assistance  nf  detailed  record.  ^ 

Workini:  costs  will  contimie  to  show  variations,  in  the 
same  districts,  midcr  the  same  conditions  of  vein- width, 
capacitv.  etc  .  hecanse  engineers,  like  other  in-ople.  differ 
in  their  views  oi  application;  hut.  nevertheless,  there  are 
certain  rtindamental  jirinc'ples  to  he  uhserved.  Ff  uni- 
formity :  re<;arded  in  mine  statements  (which  retlect  the 
local  conditions'),  a  desire  to  efTect  lei^itimate  ccnnomv 
will  he  created,  and  inferior  methods  will  soon  he  elimi- 
nated. .As  a  concrete  example,  in  illustration  of  the 
methods  sometimes  applied  in  the  seprctration  of  accou,  ts, 
where  millini:  and  cvanidation  onlv  are  omjiloved.  the 
followinsj  will  serve;  the  final  summarv  is  ijivcn  first,  in 
order  to  elucidate  some  points  more  clearlv  . 

,S'i()iii?!(irj' 

Tii-t  Percent- 

Total  C.St.  r.r  T,.ii.  age. 

MiMitic;    $I2S.787.W  S,^.^8  45. 54 

Tr;uisport   ..f  ore ^.^S7 1^  "■'"  '••^^' 

=;ortiii«  and  cnisliiiit; 8.6.',:;, .U  O.J2  .^.^"^ 

\h\\uvr    .^8.06v87  1. 02  l-'.x. 

Cvaiiichtion    .14..-^   U  o  .p 

r,n!,l   re.ili'.itic.n 4."i.'  ^■'  "  '"  '■^- 

C'lier.il   rli:,rccs 2J.0X7  <J^  ^  S7  7 , ^ 

OfTirc   expenses 0.,'''7/'O  "^4  .1  .1- 

Devehninient     M-ileniptinn .V'.45'ai  0.S4  tti 

dX'preriMtion  -  1 

Total    $.>8...6oi   M  $7.42 


::o2  Tim  LCOXOMICS  01-  ML\'L\G 

In  order   tu  make   the   above   suiiiniary    valuable,   and 

comparison  possible,  it  is  necessary  to  know  what  con- 

iribmes  to  the  several  accounts.     This  is  shown,  in  case 

nf   mining,'  for  example,  u>  be  as  follows: 

Mining.  „ 

Coet  Pcrcinl 

Tuial  e..^I.  IVt  I"I1.  aK>-. 

Salaries    ;?4.4t>-'.f«  $o.il()  .?.4') 

Wants    (skillc(l) IJ.01.S..S4  C)..5l5  9^4 

Cmlractors    io.i.p.S.S  ().-'«)  7  ■>*) 

Want's    (uii^killcd) J().-5'  .^  0.700  20. ,^ 

l\,o.l    .<uS.-<9.8.  0...S0  8.4'- 

Stores    .?.7i'J   "  o  '^J*^  2.S.S 

ICxplosucs    l--.J3j,J.)  .     ;-'0  9.49 

Charcoal    H   4"  "OOI  0.0., 

Fuel    (timber) 47,S.75  o.oi->  O..!') 

Maintenance    -',5<J0.7(>  o.o(^  2.0:1 

Workshops     .^i;.74  o.ojr  o.U.l 

Tran-port    -'.?5  'M  "O^'  "   ''^ 

Hospital    5.W.7O  0.014  0,42 

l.ahnr    prtminms -'jo.l^  o.ooo  0.19 

I'nnipmw   10.SO7.7O  0.-..S.S  «.44 

Conipoun.l   expenses .y'20.'i,S  o.cvjo  2..S 

Compressor   charnes (>.'„?"«  o  0'(>  o^'> 

Mannfacturinn  ;uui  sharpening 

li.uul    drills «.>-^J  17  o._'JO  ()o'J 

Hoisting    S7'>-Ml  "■'4'^  4  4-' 

UiulerKronn.l    traniinini; I,?,040  ()5  o..?3«  10. Os 

AsaviiiK'     '>^'■'-^  "■"-■'.;  "'1 

Snrveynm  an. 1  sampling; ^2l.^i  o  OO^  "  -3 

Totals $128,787  'kS  $.?..^8 

.\  numb'-r  of  the  accounts  L;iven  herewith,  such  as 
m;iiiuenai'ce,  iiuinpiii.i;,  uiule.  ofouiul  tranmiiii^j,  manu- 
facturing and  >har])eninK  drills.  rc(|uire  aoai:'  to  be  sub- 
divided, becaus"  tluy  in  turn  contain  important  factors; 
with  all  this  ihe  (|uestion  arises:  'lo  what  extent  does  n 
pay  to  set,  1- 'gate  mining  accounts:  The  remaining  items 
— sti'res,  w.i^es.  salaries,  fuel,  etc.— carry  us  liack  to  the 
tit"ekeeper\s  and  the  stnreinairs  records.  It  appears  to  me 
that  with  the  details  a^  -iveii  herewith,  when  accoiripamed 
by  a  correct  ilis.tribution  and  a  knowledge  of  the  local 
conditions,  the  engineer  should  be  fortified  with  materi:d 
sutVicie'ii  to  direct  the  work  ettectively  and  to  compile 
reliable   fi 'recasts. 


THE  COST  OF  MIXING 


r?53 


Prolialily  one  of  llic  iiinst  irmilik'siiim'  accounts  to  deal 
with,  especially  in  cases  where  the  shares  are  quoted  on 
tlie  market,  is  •developnieiit.'  to  which  is  charged  the 
nienev  expv'nded  in  openinsj;  up  the  ore-hcarintj;  ground, 
hefore  and  after  the  reduction  of  ore  lias  hcgun.  The 
commnn  interpretation  of  the  term  makes  it  include  all 
operations  (such  as  driving,  cross-cutting,  sinking — ex- 
clusive of  V.  ain  shafts— raising,  hauling,  sampling,  assay- 
ing, survcuig  and  handling  the  barren  ground)  which 
result  in  the  opening  up  of  ore. 

rp  to  the  time  when  milling  begins,  we  will  assume 
that  $50,000  has  been  expended  ui)on  development  work, 
and  it  is  estimated  that  100,000  tons  of  ore  have  been 
developed,  hence  an  obligation  of  o.^c.  per  ton  has  been 
created;  but  a  part  of  this  money  has  contributed  toward 
the  partial  exjiosure  of  other  tonnage,  which,  however, 
c;innot  be  accurately  estimated.  In  order  to  arrive  at  the 
cost  per  ton  of  the  developed  ore,  the  measurements  taken 
underground  are  used,  while  the  monjv  sjient  is  redeemetl 
upon  the  basis  of  the  tons  milled.  These  two  figures 
seldom,  if  ever,  agree;  and,  while  the  s  --ted  product  will 
account  for  a  part  of  the  discrepancy,  there  are  always 
large  dilTereiices  between  the  tonnages  as  measured  un- 
derground and  the  combinetl  total  of  tons  milled  and 
sorted. 

In  addition  to  this  consideration,  there  are  ninnthly 
expenditures  on  account  of  devekipment  work.  1  he 
cost  of  develoimient  per  ton  over  any  period,  as  one 
month,  depends  upon  the  width  of  the  vein  encountered, 
the  relative  jiosition  of  orebodies.  labor  conditions,  etc., 
during  that  period  ;  thus  if  devi  lojuncnt  costs  are  chargeil 
t()  the  current-month  expense,  wild  thictuation  will  occur 
in  the  working  costs.  Such  irregv'arities  create  a  feeling 
of  uncertaintv,  which  might  he  followed  by  forced  sales 
of  the  shares  and  conse(]Uent  depreciation,  a  'csult  not 
tolerated  in  sonic  mining  center.-.. 


jS 


354 


illL  ECOXOMICS  01-  MINING 


Ucl'iirc  the  rc'diK-tinii  of  urc  has  hct^un,  the  cost  of  dc- 
velupiiig  a  certain  tuiiiia^e  is  far  jjreater  than  at  any 
other  ixriod,  liecause  administration  and  other  constant 
charges  nnist  he  wliolly  carried  hy  this  account;  lience  it 
seems  only  fair  that  certain  adjustments  sliould  he  mad.- 
in  rede  •'■".  ,^  this  expencHture,  otherwise  the  present 
shareiu.uiers  hecome  unduly  taxed  for  the  benefit  of 
future  hoUkrs.  In  some  instances  the  expenditure,  on  ac- 
count of  developineiU  up  to  the  time  milling  begins,  is 
charged  to  'capital  account,"  and  written  off  in  the  same 
manner  as  machiiujry,  reservoirs,  or  other  permanent 
e(iuipme-it ;  in  such  a  case  only  the  current-month  expense 
is  charged  to  vorking  costs. 

Another  method  of  discharging  this  obligation  is  by 
creating  a  'suspense  account, '  by  charging  the  develop- 
ment expenses  to  the  reduction  stage,  and  the  excess  de- 
vekjpment  for  each  month  thereafter  to  this  account. 
Then  a  fixed  charge  is  made  monthly  for  development, 
and  the  'suspense'  account  is  wriiten  off  in  annual  suut^, 
which  are  measured  by  the  work  of  the  previous  year. 
This  method    eenis  to  give  satisfactory  results. 

it  is  desirai)le  that  the  methods  of  distribution  be  re- 
fl'H-ted  in  a  statement  of  working  costs,  accompanied  by 
the  application  of  certain  definite  principles.  'Capital' 
account  is  generally  elastic  and  often  much  abused.  The 
items  usually  charged  to  this,  such  as  machinery  and 
plant,  buildings,  main  shafts,  etc.,  arc  suppose('  to  cover 
expcnd'tnres  on  |)ermanent  work  and  eiiuipinent.  If  the 
conditions  are  such  that  the  life  of  the  enterprise  can  be 
calculated  accurately,  the  treatment  of  this  account  is 
simple,  and  the  '-apital  can  tx>  amortized  at  a  cert.iin  com- 
puted rate  of  interest.  If  this  account  be  not  embodied  in 
a  statenT"*-  "f  working  costs,  nor  referred  to  therein, 
effective  '<'  in  mine  equipnunt  is  not  retlected.  llem-e. 
for  this  anu  for  other  less  weighty  reasons,  it  would  seem 
important  that  a  certain  life  be  assumed,  or  other  meas- 


TifR  COST  OF  MIMXG 


355 


iircs  t;'kcii  uluTi'liy  the  nimuNS  nii^lit  l)i"  rcilccnud  upon 
a  fixt'd  basis,  witlidiif  iTcatintj  .'in  iniilul\  hiavv  chrir^c. 

A  (lisi-iission  thai  will  cnmhict.'  tmvanl  standardization 
of  mining;  costs,  as  well  as  toward  method  in  otluT  dcpart- 
nunts,  will  prove  of  invaluable  service,  botli  to  the  entji- 
neer  and  the  investor. 


i'".  C.   KoBIiRT.S, 


Berkeley,  Cal.,  March  7,  1905. 


COST  OF  CHLORINATING  CRIPPLE 
CHEEK  URES 

Bv  I'liu."'  Aiu..\i.L. 

(April    -.  .    1905.) 

The  special  report  on  ilif  1  ipiralions  of  the  rortland 
nimij  ami  i.ull  durin.i;  the  year  1904,  reeeiitly  issued  IjV  the 
president  <  i  the  I'ortlaiKl  (jdlu  Miiiinj;  Loiiipaiiy.  gives 
11-  for  he  tirsl  time,  an  (ipportuiiity  oi  aiial_\zm.g  and  e>ti- 
iiiatm^  die  total  e-ost  "f  ehlnriiiating  Cripple  Creek  (jre 
in  a  modern  niill. 

During  the  year  f.nd'  r  review,  the  I'c  uland  (.jokl  Min- 
ing C  oinpanv  treated  111  its  Cnlnrado  City  mill  88,997.44 
tdiis  of  ore,  averaging  $-'4,257  pet  tun.  1  he  mill  \.as 
creilited  with  earning  a  trealment  charge  cjf  $<j_'3,J53.o3 
11  handling  this  ore,  which  amounts  to  $7,003  per  inn; 
the  profit  on  the  \  ear's  nperatun  ;;f  the  null  is  said  t(j  be 
$153,1X33. 73,  or  $1.7285  per  l(,ni  tieated;  by  deducting 
the  latter  aniomit  from  the  treatment  charge,  wc  find  the 
cost  of  ni,iiiiig  :\  V>M  of  (ire,  including  metal  lo,s.  is 
$5. -'745.  'I  here  is  a  heading  doss  by  <  .\iraction,'  a  1  that 
must  me, ill  metal  loss,  $105.95141,  which  auKjUiits  to 
•'^i'9"5  I"-''"  '"'1  treated,  Iroin  winch  it  appears  that  the 
hook  cnst  "I  chlorinating  a  tmi  of  ore  during  the  past 
year  was  $4,084,  exclusive  of  amortization  and  interest 
on  the  capital  u.--ed  in  die  i)U.siness.  The  method  of  keep- 
ing the  accounts  is  somewhat  peculiar,  and  evidently  de- 
signed to  compare  the  result  of  niUing  the  Portland  ore 
in  the  I'nrtland  mill,  against  selling  tiu  ore  to  the  cus- 
Inm  milU;  thi-.  at  least.  w<uild  account  for  the  peculiar 
s\>tem  'if  ;il!.  luing  the  mill  $7  per  ton  fc  ."  treating  the 
ore,  and  1  .~hall  ir\  to  make  i\\\>  CMinparison. 

'rurning  t"  the  treasurer's  balance  sliei.t,  it  is  possible 
t'l  trace  nut  ])rettv  closeK  die  itein^  ^f  the  aliove  cost,  hut 
I  niak.'  it  \erv  nearly  loc,  ]iei-  ton  nn.re,  which  would  be 
almost    balanced    by    the    'treating  concentrates'    item,    or 


COST  or  ciii.oRix.rrixc 


X 


tlu'.'c   mav   111'   scinu'   credit    ik  t    apprircnt   nn    thu  balance 
sIkl!   llial  iiIImIs  llii>  ixli.'    \o  i:v\\\.>. 


Total 
Kxpt'iisc. 

nnllinn   oxi)cti>ie $7.Ckx).W) 

IrcitiiiR    Cdiu-fiitr.-it     S..i().i.(jj 

i.  )pcratiiiK   accuiint I  J5,()75  .  -'7 

Clicinic:ils    ()<j,45l.(M 

A'Jsay    supplies 5,,i()j.2i 

Stdie  room    aecoinit 4.i.*i75   i^ 

Fuel    (mnstiiiK  and  ilryinj^  (Uily) 3**  f'.f?  4^ 

Power   (electric  ) jfi,,V)5  02 

(jeue'al    expenses u,  i  .so . ()5 

LcKa'i  expenses io,7()<  31 

Office   expr-isc^ (i.fx;<i  07 

Office  tiirnitiire   ( lixtiires  ) ?<<>). ,vS 

Repairs     44-'. 'X> 

Treating  by-proilncts l(),4'),i.20 


Cost 

IVr  r..!,. 
$o.oJ<55 

O.0<),?.S 
I .4!-I 

o  7S04 
o .  f/xi  J 
o  41/37 
o  4-'S5 

O ,  ->Q<)6 

0.1,5117 
o  075J 

0  01(H5 
O.OOSO 


cS,S.()<)7  44  tiins^a  $4.  iSoj  =  $.37^.091 .48  or  $4.1809 
III  audition  in  tlie  fiircp;nin<;;  amounts  tlure  is  a  charge 
(if  $-'",079. 51;  to  Kitiipnitnt'  atid  S3 3  560.76  to  'construc- 
tion.' 

As  tin-  mill  ha-  liecn  in  operation  several  years  it  is 
difficult  to  understand  the  furtiier  rliari^a-  for  etiuipmcnt. 
in  addition  to  a  hcavv  construction  char<j;e  :  in  t'le  matter 
of  repairs,  liowcver.  the  palm  is  conceded  to  tiw  Portland 
mill,  unless  perchance  the  cost  of  repairs  is  hidden  in  the 
"storehouse'  and  operatins;  accounts. 

To  cottipare  intellit;ently  the  above  costs  with  the  rates 
char.Ljed  for  treating;  ore  by  tlie  custom  chiorination  mills, 
\vc  must  inclii.le  amortization  and  the  ca])ital  involved  in 
the  business.  It  is  well  known  that  the  custon;  mills  pay 
for  the  ore  .as  it  is  sampled,  and  .arry  a  larye  stock  of  ore 
on  hand,  usually  a  month's  run.  Therefore,  we  must 
charge  to  the  PortK-n  !  .nill  the  interest  on  the  capital 
locked  up  in  ore.  bullion,  stores,  etc.,  and  I  shall  assume 
the  followini,'^ : 

Ore.  ,1.000  tons $50,000 

'^tore    ,1o.o<K) 

r.i.llion  .-md  iinM  in  vohuuiii.  He 40.000 

Workint;    e.ipital     ,^0,000 

Total    $150,000 


i' 

\\.s 

I'ii 


358  77//-  liCO.\UMlLS  Ot-  MIS  ISC, 

'I'lis  at  MS    will  i'(|ual  o.  1,550.   per   loii  ui  ..r'  treated. 

Suiuniaruir.^^  tlu^e  tii;iires  we  have  the  fcilluwing: 

Cost   of   cliliiruuitiiig    (liDok  cost) $4,084 

IntiTc-^t  nil  capital  iiivotfij   111  tlie  buMiic^s o.  i.lj 

Ainorti/atiuil.   ;.ay O.701 

Metal  lo^, ''90 

Total   $0.  l(>) 

It  wniil.l  appear  that  the  s^nld  in  the  (ire  i-  l-illed  to  the 
I'ortland  null  at  $ju  per  nz.  ithe  priee  paid  by  the  ctistuiii 
mills),  less  $7  per  t.m  treatiiuiu  chari^e,  so  we  are  now 
in  position  to  make  a  lair  cMiiiparisoii  between  the  Port- 
land mill  and  the  ■.ustoin  milN  in  the  matter  of  total  cost 
of  ehhjrinatiiii^  (.ripple  I  reek  ore.  .\>  noted  in  tliis 
jot  k.N.M.  tor  Deeember  Ji.i.  l<)o4.  p.  lojj,  the  rate  ehar^ed 
by  the  eiistom  mills  on  ore  vary  ins,'  "■'""  '-'5  '"  '-5  '-^^■■ 
of  gold  is  'S'7~S  P^T  ''  "■  li^'^^  ^'  P'-'''  ^'""^  ""  l"">;-tinic  con- 
tracts, so  oil  the  latter  liasis  C^^hJl)  it  eaniiot  lie  said 
that  the  charge  of  the  ctistom  chlorination  mills  is  too 
high:  thev  have  a  large  amount  of  cajiital  invested  in 
tlu'ir  plants  and  are  entitled  to  a  good  interest  on  the  in- 
vestment, considering  the  eiihemeral  nature  of  tli:  busi- 
ness they  are  engaged  in. 

i  am  plea-ed  to  see  continued  improvements  in  the 
chlorination  process.  ;is  shown  in  the  following  extract 
from  the  report  <if  the  superintendent  <if  the  Portland 
mill:  ■■\\t  have  inaugurated  a  -vstem  of  saving  the  values 
in  wash-water  from  the  barrels,  which  has  heretofore 
run  down  the  creek,  and  now  saves  the  comi)any  thou- 
sands of  dollars  each  vear." 


COST  OF  MINING  AND  MILLING 

UV    R.    J.    <  iWAN  r. 

The  detailed  expenditure  t<i  he  discussed  refers  to  oper- 
ations at  the  t"osinii]X)Htan  mine,  situated  at  Kuukynie, 
in  Western  Aiistraha.  I'he  figures  are  those  for  Sepiein- 
h(T.  iix>4-  I'  sliouhl  l>e  added  tliat  the  CosntopoHtan  is 
ahi  lit  5UO  miles  from  tiie  coast,  and  uo  miles  northeast 
from  Kalf^ooriie.  on  the  ,i;overnment  railway. 

It  is  one  of  the  many  companies  in  Western  Australia 
under  the  management  of  Messrs.  Bewick,  Morcing  & 
C(>nii)any  ft  was  taken  over  by  tlieni  in  the  latter  pai^ 
of  ii;(U,  with  II.  .\.  Shi])nian  as  mine  manager.  .At  that 
time  th.>  costs  were  about  -S'l/S  Jier  ton  for  mining  and 
milling.  When  Mr.  Sliipman  left,  in  May,  np4,  the 
costs  had  been  redu.ed  to  $2.95.  The  writer  succeeded 
^ir.  Shipman.  (.leorge  (iill  is  un<lerground  superinten- 
dent, ;uitl  .Alfred   I'.huimfield  is  mill  superintendent. 

1  be  C(^nditions  are  not  all  that  might  be  desired  for  low 
costs;  the  latxir  (luestion  is  a  serious  one.  and  wages  are 
high  for  the  class  of  wurkmen  employd.  The  average 
wai:e  Tier  ei^iit-iiour  shift  is  .ibout  $,^20:  tins  includes 
all  classes,  ir-im  $2.8=;  per  shift  paid  to  truckers  and  shov- 
elers,  which  is  the  lowest  rate,  to  $4  per  shift  for  machine 
men  working  ni  wet  gfonnd.  being  the  highest  rate.  l'>oth 
machine  men  get  the  ."•;.me  late :  in  c.tlur  words,  no  helper 
is  recognized 

'Supplies  are  all  high.,  explosives  costing  50''  more  than 
in  .Xnurira.  and  other  goods  m  proportion.  Wood  is  used 
for  fuel,  ;uid  costs  about  $3.t'K>  per  cord,  two  cords  being 
e'|ual  to  one  ton  of  average  coal.  .Mine  water,  which  is 
salt    and   conains    i7'    solid   matter,   is   used   for  steam- 


360 


Till-.  /-.COXOMUS  ()!■  MIXfXG 


iiiL:    'inil    is  a   (.•niist.nit   ixpciisi'       Tlie   coU   of  clcanint,' 
li'ilcrs  aloiu'  is  ovir  i>,VX'  V-'^  nioiilli. 

I  1k'  ore,  or  ■stom-,'  as  ii  is  called,  is  a  jjlassy  wliitc 
(|iiartz,  carryiiijj;  a  small  amnuiit  of  iron  pyritc.  aiitl,  at 
prisi'iit,  aixuit  7  (Km.  -did  per  ton.  TIk'  'reef  lies  at  an 
aii,L;li.'  of  41  hftwi'cn  li:u<l  j^ranitc  walls,  and  aviraf^cs 
S  It.  in  width,  occasionallv  rarr\iii^,'  from  1  to  4  ft.  of 
waste  in  the  eentir.  .\11  ore  in  the  sto])es  lias  to  lie  sliov- 
eled,  owini,^  to  the  flatness  of  the  foot-wall.  I'or  the 
month  under  report,  the  ore  eame  from  the  700.  Soo  and 
<jo()-ft.  levels— hut  ehietly  fnni  the  (joo-ft.  level.  The 
ore  is  trncked  from  the  stojtes  to  liins  at  the  shaft,  and 
lioiste<l  from  there  in  skips,  holding:  ahout  _'.',  tons  eaeh, 
to  the  surface,  where  it  is  duniptd  into  hins.  It  is  run  hy 
{gravity  over  j^rizzjies  into  I'.lake  crushers  set  to  1.1  in. 
It  is  then  hoisted  50  ft.  and  trucked  to  the  mill  hin^.  The 
mill  contains  50  stamps,  each  \vei.i;hin.E^,  when  newlv  shod. 
l.0()0  11).  The  dro])  is  S  in.,  and  the  speed  averages  loO 
drops  per  minute.  The  screens  used  are  20-mesh  wire- 
cloth,  and  the  lieit^ht  of  dischart^e  is  from  \  to  j.l  in.  The 
pulp  ROCS  from  the  stamps  over  copper  ]>lates,  u  ft.  loni.:, 
then  over  10  \\ilt1ey  tahles  to  a  tailin<,'-  wheel,  where  it  is 
idevated  50  ft.  and  run  into  leachin<;  vats,  which  are  fitted 
with  distrihntors :  here  the  sand  settles,  and  is  treated 
with  cyanide.  Tlie  sand  residue  is  carried,  hv  trucking: 
and  hoistimj.  to  a  dump  (>o  ft.  hij;h.  The  slime  runs  hack 
to  spiizkasten,  where  it  is  settled;  then  it  passes  into  ajji- 
tation  vats  and  is  treated  with  a  0.077;  cyanide 
solution,  and  f^.lter-prcssed ;  the  overflow  water  is  run 
hack  to  the  hattery  and  used  atrain.  The  residue  is 
trucked  to  a  mixer,  where  water  is  added,  and  afterward 
pimiped  to  a  dam. 

The  niininp  and  milling  costs  irchide  everything;  ex- 
cept the  London  oflice  expenditure,  and  cover  taxes,  in- 
surance, .general  mana;;er's  salary,  etc.  All  development 
work   m   the   mine   is  done  on  contract  at   the   following 


Mi.xi.w;  .1X1)  Mii.i.i.w,  icsis        :$<u 

.•i\t  r;i)4c  luui's:  l)rii't<.  Si<>;  en  ps><-iiiIn.  :>i2.50;  rai.scs. 
ijiK.jn  ]nr  It  I  lie  (.1  •nlr.iiii  .r  p^llVl(|<■^  ;ill  txplosivis  ami 
I'aiiillis,  ,iii.l  ililuiTs  ilic  I  ir  iiiiii  the  liiiis  at  tlii'  main 
■-lialt,  llu-  >niii|)aii\   t'liriu- hint;  iiri!l<,  ti"'K  ami  ix)\\cr. 

rri'cipitatiim  take--  plan-  in  "nliiiarv  zmc  Imxis;  llu' 
ck'aii-ii])  is  ttKcti-il  ii\  tin-  ai'id  UKtliiiil.  '['hv  ruastiiiL; 
anil  smi'ltin^  arr  iji-m-  in  ilic  usiial  maniK-r 

Tin-  !^'i)l'1  i'-  ixifartid  :is  fullnws: 

Aiiialnatnatinii    (hoxus   ami   plates) 61.55'^ 

(ciiu-cntralr    In    i-> ani-latiuM •''So" 

S.iiul   by   rvani.l.itii'ii 14   50  " 

Sliiiio  liy  oyaindatioi!  and   liltcr-pn  ^■^IMK (1.00  " 

Total    extraction QO  55  " 

Average  value  nf  'lieaiN'  fi>r  ninnlh 6  dwt.   iS  f,'r 

Aver.ige  value  of    residue^'  fur  niuiilh o      '       15    ' 

1  lu'  cost  (if  tmninL;  was  as  fdlows : 

Per  Ton  Mine'l. 

Labor  and   -alaries $o.4S 

Explosives    n.iosn 

Caudles    o  nijs 

Steel    0.0705 

Sundry    snpplie- o  o<iio 

Power  for  niaeliine  drills o.  i.vx) 

Assaying  and  ^ainplnig o  01^5 

Repairs  and  niaiiuenance o  04.10 

(iencral    expenses 0.0575 

Proportion    pumpin.s; o.  I JJ5 

Trucking  and   hoisting  ore o.  J,^5n 

Timbering  and   lillmg   slopes o.  i.ioo 

9,ig.^   tons $1   3555 

The  cost  of  iirillino;  js  t^ivcn  in  the  tahle  lielnw  : 

I'cr  T..11  Mill.-. I 

Rock-breaking    $0 .  o.^Sj 

Ore  transport,  fmni  crushers  to  mill-bins o.odiS 

Rattery    and    |)Iates 0.4O<)_' 

Concentrating  0.0340 

Cyaniding    concentrate o  oj.^t) 

Cyanidiug  sand   by  pen  . ilation o  JJ54 

Cyaniding  slune  by  agitation o.oSSf, 

Filler-pressing   slime , o  077!) 

Precipitation   and    smelting o  o6<)S 

Disposal  of  residue o  177S 

9,ig3  tons $1 .20.50 


362  TUB  F.COSOMICS  01-  MIMW: 

1  he  workini;  cnst  ptr  .ut-i.il  ton  treated  was  a>  t'lllnws 

IVr   l.in  Millcil. 

I.,ih(ir  aiul  salaries $o.«/)6 

Power  o  1750 

Repairs   ami    lu.iiiileiMiice 00544 

Assaying   and    ^anll)llll^{ 0.007^ 

(loiieral    exiicnscs o.oioK 

ymcksiher    o  0070 

Slioes  ami   dies 0.0358 

Sundry    supplies o  oaS4 

Total   cost $0406^ 

C"iiCt'ittiati)ij;   (157   tons  Siived). 

Labor    and   salaries ; $'   ■^'94 

I'ower  04^66 

Repairs  atul  maintenance o.  1318 

Ciencral   expenses o  1466 

Sundry    supplies o.  0654 

Total  cost $1.9898 

CwntiiUni;  Coiicrnfyatc  fl^j  /^itit  treated). 

Labor    and    salaries $o.4-'86 

Tower    00366 

Assaying °  "-'f^ 

(1.  niril    exiieii^es    00406 

Potassium  cyanide "  ~'^- 

Total  $1  3364 

CviJiii./iii;'  .V""('  h  /''•'■'■  'I"!'-'"   C'T^''  tous) 

I'tr  T.iii  Trcatcil. 

Labor    and    salaries $0  04<j8 

Tourr     o,07J4 

Repairs  and  maintenance 0.04J8 

Assaying    00064 

(lencral    exinn^es o  0060 

Potassium  cyanide   o.og.?6 

Sundry    supplies 0.00J4 

Total  cost $0.2734 

CyaniJiiig  SHiiic  by  .V^ilalioii   (1.456  tons). 

I'lT  Tiiii  Treated. 

Labor  and  salaries $0.0906 

Power    00308 

Repairs  and  maintenance 0,0530 

AssayiiiR    0.0J18 

General   expenses o  0106 

Pot.i'-sinin   cyanide o  3294 

Sundry    supplies o  o_'2j 

Total  cost $0.5584 


MIMXii  .IXI>  MII.I.I.W;  COSTS  :?";:5 

I  tllrr  [rrssnii;   Shut,-    {  1,45')   l''».0 

IV>  T.H,  Tr.  .it,,| 

I.abiir    ,inil    s.il:iru"^ $0  ,V(W 

I.iucr                         n  ojii^i 

Ropair-i    ,ini|    miiiitrnance o  otd.' 

Ciciier.il   txpiMse* o  (141H 

Filter  rldth    O  n?.?6 

Siiivlrv    -!i|iplics                         ooogj 

Tntal    .^.1                                         $0  4f/1J 

l'r,\tritiili:>n   iind  Siiu-ltiiii;    (y.IOJ  'c>i/.''> 

Per  Ton  Trrati-d 

l.ahor    anil    vilarit";    $0  ojn4 

F^cpairs  and  maintriiance o  nojj 

A<;':ayinu    n  oo;i) 

ieneral    expenses o  no.>4 

Furl         o  0(14(1 

7inr   <;havine<..                  o  ni  iS 

S'lliihiiric  :>ci'i                       , n  oijCi 

Simdrv    >npp!r<   o  ni)88 

Total  cost $o.o6<j« 


i 


MICROCOPY    RESOLUTION    TEST    CHART 

ANSI  and  ISO  TEST  CHART  No    2 


1.0 


I.I 


m  jiiii   1 2.5 

"'3  2 


36 


"III  2.2 
1.8 


'•25    III  1.4     i  1.6 


^  APPLIED  \M/\(3E     Inc 

=1  -53   EosI    Mom    Slfisel 

r-=  -chesitr.  New  rofh    .4609   USA 

-=      '6)  *8i  -  0300  -  PHone 

==     '6)  288  -  5989  -  Fa. 


HOIST  BY   HIS  OWN    PETARD 

(l-.iiil..nal,    April    J,-.    i^-S  • 

A  spaMii  of  exactitude  has  swept  across  the  inininj^ 
world;  'ore-reserves'  lias  become  a  term  of  dreaded  im- 
port ;  the  younj;  men  have  armed  themselves  with  a  bt)om- 
eraiig  and  the  old  hands  have  been  astonished  into  silence. 
The  canipais;n  ior  method  in  sampling;,  for  conscience  in 
estimating,  and  for  science  in  final  appraisal  of  mines  has 
succeeded  beyond  our  expectation.  Transmission  of 
ideas  has  been  helped  by  the  technical  literature  of  the 
profession,  and  now,  like  the  undertow  that  meets  the 
oncoming  surf,  we  are  receiving  the  backward  wave  of 
a  discussion  that  has  spent  its  force  for  g(jod.  W'e  are 
threatened  with  virtues  that  have  been  exaggerated  to 
vices,  and  with  methods  that  have  been  debased  to  a 
fetich.  The  whole  question  of  ore-reserves  lias  become 
a  state  of  mind;  there  is  a  palsy  on  judgment,  an  eclipse 
of  experience. 

The  milling  engineer,  who  once  used  his  brains  with 
cheerful  ct)nfidence  to  formulate  clear  opinions  regarding 
the  condition  of  a  mine,  now  stands  panic-stricken  on  the 
edge  of  a  difficulty  from  which  he  cannot  retreat.  From 
enii)liasizing  the  care  re(|uired  in  determining  the  com- 
mercial value  of  ore,  from  the  demand  that  the  old  happy- 
go-lucky  style  of  inspection  shall  no  longer  be  tolerated, 
from  these  and  other  efforts  to  ally  science  with  experi- 
ence, we  have  passed  to  that  stage  where  engineers  state 
tonnages  with  fearsome  minuteness  and  (piibble  over  as- 
says of  academic  difference,  until  the  last  stroke  of  all 
is  the  suggestion,  in  South  .Africa,  to  'audit  ore  reserves" 
and  app.  lint  a  government-certilicated-ore-reserve-audi- 
tor!  In  truth,  it  is  time  to  pull  up.  West  Australian 
mining  lias  been  suffering  from  this  intoxication  of 
theory  until  it  is  recognized  that  each  estiinate  of  the  ore 
blocked  out  in  a  mine  must  be  more  consirvative  than  the 


HOIST  BY  ins  oirx  petard 


oi).". 


last.  A  variatidii  wliich  is  no  real  difference  becomes 
a  discrepancy;  a  capable  engineer's  work  is  stultified  by 
that  of  another  cciually  capaljle.  simply  because  the  two  of 
them  do  not  sing  a  perfect  duet  of  appraisal,  and  share- 
lK)l(lers  tremble  every  time  a  cablegram  comes  from  the 
mine  manager.  It  has  gone  so  far  that  the  general  condi- 
tion of  a  mine,  the  metallurgical  treatment  of  the  ore,  the 
excellence  of  management,  are  of  no  avail  when  weighed 
against  the  estimate  of  the  ore  in  reserve:  indeed,  one 
could  maintain  the  shares  of  a  mining  company  at  a  big 
premium  without  producing  an  ounce  of  gold  or  paying 
a  pennv  of  dividend,  if  only  at  stated  intervals  some  engi- 
neer wiiuld  ccrtifv  that  the  ore-reserves  had  increased.  In 
South.  .Africa  the  sampler  looms  almost  bigger  than  the 
consulting  engineer,  and  in  .America  the  Iinglish-owned 
mines  which  are  suffering  from  the  same  miasma  are  de- 
.-cribed  bv  their  engineers  in  terms  which  are  so  cautious 
that,  whether  twice  as  much  or  half  the  amoimt  of  ore 
stated  should  be  eXLr;ii-teil.  no  censure  would  be  possible. 
In  the  old  days  they  guessed  twice  and  divided  by  two  for 
accuracy's  sake  :  no\\ad;iys  the  engineer,  more  solicitous 
for  his  own  reputation  than  his  client's  welfare,  hedge, 
with  providence  anfl  divides  by  two,  so  as  to  be  safe.  Min- 
ing is  being  made  ridiculous  ;  there  is  an  idea  that  risk  can 
be  eliminated,  that  shareholders  can  insist  on  supernatural 
closeness  of  calculation,  that  engineers  must  save  their 
skins  and  that  everyone  nuist  "get  out  from  under"  when 
an  orebody  hafipens  to  misbehave. 

And  in  all  this,  have  we  not  lost  the  main  point  of 
mining — what  the  old  Cornish  captains  would  call  the 
'sport'  of  it — the  exercise  of  experienced  judgment  in 
sizing  up  the  present  character  and  future  prospects  of 
a  mine?  It  appears  so.  We  no  longer  buy  a  mine  for 
the  chance  of  favorable  development,  the  making  of  a 
mine  out  of  a  prospect,  or  a  bonanza  out  of  a  stniggling 
hole-in-the-ground  :  we  take  no  risks:  we  buv  ore. — as  if 


i 


1 

i. 

:!(;() 


Tim  r.coxoMics  op  mixing 


by  all  the  measuring  and  assaying  and  arithmetic  \vc  can 
eliminate  the  essential  risk  of  estimating  what  we  do  not 
see,  save  at  its  edges.  Sample  and  survey  and  calculate 
all  ycu  please,  and  then,  even  if  you  face  the  facts  like  a 
man  and  do  not  play  tricks  to  avoid  responsibility,  you 
still  have  only  one-half — sometimes  not  even  one-half — 
of  the  essential  problem.  The  future  prospects  of  a  mine 
remain  beyond  the  vision  of  a  timid  doctrinaire;  to  gauge 
them  fairly  needs  the  ability  to  observe  beyond  the  point 
of  the  fii.K.  and  the  honesty  to  weigh  facts,  to  an  extent 
far  be\ond  the  shifting  compromise  of  a  conservative 
ore-reserver.     It  is  time  to  get  back  to  bedrock. 


DREDGING  AT  OROVILLE* 

By  L.  J.  Hoiiu 

(May    1  I.    1905  ) 

The  averacje  running;  time  of  the  boats  varies  a  great 
deal  in  dilicrent  months  and  under  ditiferent  circum- 
stances. A  new  boat  will  be  able  to  make  better  running 
time,  as  no  serious  breaks  are  likely  to  occur  if  it  has  been 
made  strong  enough  in  the  first  place.  A  breakdown  of 
any  magnitude,  such  as  upper  tumbler  shaft,  lower  tum- 
bler shaft  or  bucket  line,  will  cut  down  the  average  run- 
ning time.  Where  the  boats  are  influenced  by  the  stage 
of  the  water  in  the  river,  high  water  may  seriously  ham- 
per them  at  certain  seasons,  and  last  winter  was  an  ex- 
ceptionally severe  one  in  this  respect,  high  water  occur- 
ring as  early  as  November,  1903,  and  being  with  us  all 
through  February  and  March  of  1904.  To  show  an 
extreme  case  I  have  taken  a  selected  year  in  the  run  of  a 
boat  exposed  to  the  high  water,  so  that  the  year  contains 
all  the  high  water  of  last  season. 

Beside  high  water  troubles,  the  bucket  line  was  in  bad 
shape  and  broke  frequently,  the  upper  tumbler  shaft  broke 
twice  during  the  period  under  consideration,  the  lower 
tumbler  and  its  shaft  had  to  be  renewed,  also  the  con- 
veyor-belt, and,  to  cap  the  climax,  the  power  was  abnor- 
mally unsteady  and  unreliable  during  most  r  f  that  year. 
The  nmning  time  of  the  boat,  figuring  on  the  basis  of 
365  days  in  the  year  and  24  hours  to  the  day,  was  16 
hours  out  of  24.  It  may  seem  odd  to  call  particular  at- 
tention to  the  fact  that  in  this  calculation  the  year  is  taken 
as  having  365  days  and  each  day  to  have  24  hours,  but 
when  you  look  over  the  records  of  some  of  the  boats  you 
will  find  that  some  of  the  stoppages  (such  as  high  water, 
holidays,  etc.)  are  not  counted  on,  the  owner  or  manager 

*  Abstract  from  paper  rcnH  hefore  the  Thirteenth  Annual  Con- 
vention of  the  Caliiomia   Miners'   Association,   December,    IQ04. 


368  THE  ECOXOMICS  Of  MINING 

nrt^niin.c:^  that  the  dredpc  should  not  be  charged  with  any 
dilay.s  not  orij;inatin,2:  '"  the  dredge  or  its  appurtenances. 
The  simple  trutli  that  the  dredge  is  not  earning  anytliing 
when  it  is  stopped,  wlietiier  sucli  stoppage  originates 
within  or  without  tlie  dredge,  and  wliich  fact  finds  ex- 
pression on  tlie  balance  sheet  of  the  company  at  the  end 
of  the  year,  is  sufficient  to  show  the  fallacy  of  the 
assuminion.  Returning  Xn  the  case  under  consideration,  I 
append  a  tabulated  statement : 

Causes  of  Stoi^pascs,  in  Per  Cents. 

Relting  1.3 

Bucket  line 2^.\ 

Linos   breaking  ami   ciianging 4.8 

Cleaning   up 1.7 

Conveyor   51 

Flovating  mac'.iinery 1,5 

I'riclions   and    winches 2.5 

Cioneral   repairs 1.7 

iligh    water 15.5 

Holi<lays    j  8 

Ladder  and   ladder  hoist 1.3 

Lower  tumbler   ^4.3 

Oilmg   38 

Power  off 4.5 

Shaking   screen 45 

Stniies,   roots   and   stumps 0.7 

Upper   tumbler j(,2 

Water  pump 14 

Total  100. o 

Another  set  of  figures  follows,  covering  the  operations 
of  dredges  over  a  period  of  three  years,  and  it  is  but  fair 
to  state  that  the  high  percentage  shown  under  the  head 
of  power  troubles  is  not  attributable  to  the  present  com- 
pany operating  in  ihe  field,  but  to  an  ol  ,er  electric-power 
plant : 

Causes    of   Stoppages,    in    Per   Cents. 

Moving  ahead 57 

Poiver   troubles iy(, 

Repairs   and   holidays 754 

Sand   pump ^,^ 

Total  1000 


DREDGING  AT  OROVILLE  3G9 

The  averap;e  runninc^  time  for  the  period  p^iven  was  i6 
hours,  56  minutes.  From  other  records  extending  over 
loncf  periods  of  time  it  is  probable  that  the  best  averaj^e 
runninc^  time  of  the  boats  will  hardly  exceed  18  hours 
out  of  24,  taking  all  causes  of  stoppages  into  consideration 
and  figuring  on  365  days  per  year.  It  is  true  that  in  a 
few  lases  better  running  time  has  been  obtained,  but 
where  this  has  been  the  fact,  it  was  due  to  conditions  sur- 
rounding that  case,  which  it  is  not  safe  to  figure  on  in 
every  instance. 

While  the  figures  so  far  presented  were  for  Bucyrus 
boats,  I  have  condensed  from  Mr.  Monroe's  paper  in 
the  Mining  (Uid  ScicutHic  Press  of  February  6,  1904,  cor- 
responding data  for  a  5-cu.  ft.  Risdon  iwat,  whichk  I  give 
below : 

Causi'S    of   Stof'f'af^rs,    in    Per    Cents. 

Riickct  line  and  ladder 30.7 

Clean   ups 7.7 

(iencral   repairs 17. g 

Lines    g.q 

Power   troubles 7.9 

Pumps    5.4 

Screens    4.5 

Stacker    9.4 

Total   100. 0 

The  data  above  extended  over  a  period  of  one  year,  but 
not  a  picked  one,  it  being  a  regular  calendar  year.  The 
bucket  line  on  the  boat  was  renewed  during  the  year, 
which  raises  the  percentage  of  time  lost  on  account 
of  the  bucket  line  and  ladder.  Comparing  the  percentage 
of  time  lost  on  account  of  shaking  screens  and  stacker 
with  the  percentage  given  for  the  picked  year  of  the 
Bucyrus  boat,  we  find,  curiously  enough,  that  the  loss 
due  to  the  shaking  device  in  either  case  was  exactly* the 
same,  while  the  Risdon  stacker  shows  9.4/^  as  against 
-,.^'":  for  the  belt-conveyor.  The  running  time  of 
the  Risdon  dredge  for  the  year  amounts  to  16  hours,  31) 
minutes  out  of  24  hours.    The  cost  of  repairs  to  the  con- 


370         run  licoxoMics  oi-  mixing 

vcyor  <liirin<;  the  year  I'l  t  tlic  KImIoii  Ijnat  animinted  to 
$1,241.28,  an  aiiiount  whiili  about  (.iiuals  the  cost  of  tlif 
bclt-convcyor  in  thir  particular  instance,  if  tlic  difYcrcncc 
in  lost  time  is  taken  into  consideration. 

As  to  the  capacity  of  tlie  ditterent  iy])es  and  styles  of 
boats,  no  fixed  rule  can  be  hid  down,  for  the  reason  tliat 
tile  same  dredi^e  in  diiiferent  j;roiind  m;iy  not  be  able  to 
make  as  much  of  a  yardage,  owing  to  local  conditions. 
To  mention  one  of  these  conditions,  1  wi^uld  say  that  the 
washing  of  very  sardy  soil  is  more  dithcult  than  that  <it 
pure  gravel,  and  it  may  be  necessary  to  cut  down  the 
digging,  for  the  reason  that  with  full  buckets  the  riffles 
become  crowded. 

A  fair  average  yardage  would  be  about  as  follows : 

liuckct  Capacity.  Yd.  I'er  Montli. 

Risdon    (Iredj^'c ,^  cu    ft  25.000  to  35,000 

Risdon    dredge 5  cu.  ft  35,000  to  45,000 

Biicyrus   dredRc 3  cu.  ft.  .?5.0(xi  to  45,000 

Bucyrus   dredge 5  cu.  ft.  50,000  to  65,000 

The  above  figures  would  represent  the  work  of  a 
dredge,  as  now  in  use  in  the  Oroville  district,  extending 
over  a  long  period  of  time.  The  maximum  obtainable 
will  far  exceed  the  figures  quoted,  and  may  be  kept  up 
for  a  short  period  with  any  one  of  the  boats. 

The  cost  of  production  depends  to  a  great  extent  on 
the  magnitude  of  the  enterprise,  which  reduces  the  gen- 
eral expenses  by  dividing  them  up  among  a  number  of 
different  boats,  and  by  the  chance  of  diminishing  the 
cost  of  repair  by  the  erection  of  shops  near  bv.  It  has  to 
be  kept  in  mind  that  the  operating  expenses  are  intlucnced 
by  local  conditions,  such  as  nature  of  the  ground,  general 
efficiency  of  digging  and  washing  appliances,  adjustment 
of  motors  and  resistances  to  their  work,  cxtraordinarv 
repairs  occurring  in  short  periods  of  time  and  a  number 
of  other  details. 

The  following  statement  will  give  a  fair  representation 
of  the  extremes  of  the  cost  per  cubic  yard  of  material: 


DRF.nciXG  AT  OROriLLE  371 

Operating  I'.xtmscs  P,r  Cubu    Vcirii  of  Material. 
Power    I  fVi  I  JO  11^  161  I  77 

l^ep-i'"  -' «<'         ^o^         ,v.,6         ..,,7  ,.,s<) 

Labor    1    ,4  i  Sj  1  .S5  j  .,,,  ...05 

(jeiKTal    (.xpiiiscs.   0(14  o  ()7  1   j.j  i.jS  075 

•otals    0  JO  6.72  7.6g  8.ig  8.35 

The  (lata  fur  tlic  above  statement  were  obtained  from 
different  operators  in  the  district ;  the  period  over  which 
they  extend  is  in  each  case  not  less  than  one  year.  In 
some  of  the  figures  f^iven  the  taxes  are  included  under  the 
heading  of  general  expenses,  in  others  they  are  not.  The 
cost  of  superintendence  in  some  instances  is  included 
under  the  item  of  dredge  labor,  in  others  it  is  charged  to 
general  expense,  but  in  all  cases  the  totals  give  all  the  ex- 
penses incident  to  the  working  of  the  dredge  and  keeping 
it  in  gootl  running  order. 

The  life  of  a  boat  has  not  been  determined  as  yet,  but 
with  a  well  and  strongly  constnicted  hull,  which  is  taken 
good  care  of,  it  should  be  not  less  than  12  to  15  years  in 
this  climate.  It  is  self-evident  that  during  that  period  a 
great  portion  of  the  machinery  and  appli.ances  will  have 
to  be  renewed  over  and  over  again,  siTch  as  tumblers,  lad- 
der rollers,  buckets,  shaking  screens,  pulleys  and  shafts, 
spuds,  conveyors,  etc. :  but  the  item  of  dredge  repairs,  as 
shown  in  the  above  statements  of  cost  of  operating,  will 
cover  these  items,  and  there  is  no  doubt  that  the  experi- 
ence gained  so  far,  and  which  will  be  gained  in  the  future 
will  have  a  tendency  to  gradually  diminish  such  expenses, 
and,  what  is  even  more  important,  forestall  the  occurrence 
of  larger  mishaps. 


t  v 

s 


; 


THE  COST  OF   MINING 

(May    II.    iv'^5) 

I  lie  Ldilor: 

Sir — Mr.  [iif:;alls'  viry  inrtiiu'iit  aitiflc,  'Cost  of  Min- 
ing in  AnKrica,"  brings  np  a  .subject  inditing  tile  broadest 
discussion.  There  are  feu  of  us  wlio  liave  managed  nun- 
ing  properties  ulin  eannnt  add  sonieiliing  to  tlie  general 
fund  of  knowledge  in  tliis  deparlinent.  My  own  custom 
has  l)cen  always  to  keep  a  monthly  record,  and  at  the  end 
of  the  year  tn  make  a  full  general  report  in  the  form  uf  a 
statement  of  cost  and  production,  i  happen  to  have  re- 
tained a  copy  of  one  of  the.se  re[)orts  made  several  years 
ago,  and  no  harm  can  be  done  now  by  making  it  public. 

The  results  may  not  be  'standard,'  but  when  it  is  taken 
into  account  that  we  were  Oo  miles  from  even  a  wagon 
road,  and  that  the  lode  was  only  from  2^  to  3  1-3  ft.  wide, 
and  the  orebodies  small  and  scattered  over  three-fourth.- 
of  a  mile  on  the  strike,  it  will  be  seen  that  worse  might 
have  been  done.  (Jf  course,  in  a  report  of  this  nature, 
only  the  general  headings  are  re<iuireil,  and  these  sift 
down  to : 

Cost  per  ton  : 

I'rospectitig  and  dead  work. 

Ore  extraction. 

Ore  reduction. 

General  e.\])cnses  and  sundries. 
To  determine  these  a  more  or  less  detailed  series  nt 
accounts  mu>t  be  kept.  In  my  own  u(jrk,  1  have  con- 
sidered only  a  few  general  subdivisions  as  necessary 
although  strict  account  is  kept  of  everything  in  detail. 
For  instance-  In  my  'statement  of  costs,"  etc.,  ore  extrac- 
tion  is  what  is  usually  classed  as  'mining,'  and  this   I 


THE  COST  or  MIXIXG 


in.-? 


consider  as  made  up,  fnr  the  i)iiri)'isf  of  tliis  rcpurt.  al)oiit 
as  follows: 
Mining : 

Assay  department : 

Lahor. 

Materials. 

Sundries. 
Ore  hreakinjj: 

Labor        ) 

Materials  j 
Includinf^f  same  for  tinibcrinj^,  etc. 

Sundries. 
Administration  : 

Salaries. 

Ciemral  expenses. 

(  )ftici.-  e.xpenscs. 
Under  tiie  head  of  'materials'  is  bunched  everything 
used  in  that  line  durin<;  each  month.  'Sundries'  embraces 
minor  expenses  not  coniinjj  under  any  one  of  the  general 
headings  adopted — item  ii  of  Mr.  Ingalls'  list.  'Ck-neral 
expenses'  embraces  the  fixed  expendituies  in  carrying  on 
the  work,  such  as  items  4,  5,  9  and  10  of  Mr.  Ingalls'  list. 
In  this  way  one  gets  a  full  and  accurate  idea  of  the 
work  carried  on  during  a  year,  without  the  need  of  tabu- 
lating all  expenses  in  minute  detail :  for  subdivision  can 
be  carried  out  to  the  point  of  stultifying  the  object  in 
view.  Although  some  improvements  can  undoubtedly 
be  suggested,  still  I  believe  that  such  a  compilation  as  I 
here  present  about  covers  the  ground,  and  gives  a  much 
more  full  information  than  could  fifty  pages  of  written 
report. 

All  repairing,  of  whatever  nature,  in  the  mine,  all  drift- 
ing, sinking,  raising  and  timbering  of  such  works,  run- 
ning out  waste,  etc.,  I  always  class  as  "prospecting  and 
dead  work.'  and  only  consider  the  ore  as  mined  when  it 
is  delivered  to  the  bins  or  on  the  dump.     All  sorting  and 


374 


Tin  iiCOxOMics  Oh  .u/.v/at; 


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376 


THE  nCOXOMICS  01-  MINING 


preliminary  work  necessary  to  secure  workable  ore  should 
be  charj,a'il  to  'ore  ertraction."  In  the  case  we  now  have 
under  consideration,  it  will  he  noted  that  about  33  per 
cent  of  tin  cost  per  ton  was  due  to  prospectinjr  and  dead 
work.  Tiiis  was  due  to  the  ury;ent  need,  at  all  times,  for 
ore  ;  there  heinsjf  practically  no  reserves,  and  no  regular, 
cnntinunus  or  .body.  Under  the  head  of  'general  ex- 
penses." I  always  include  improvements  of  all  kinds,  and 
have  always  charsj^ed  the.se  to  the  working  expenses  of  the 
month  in  which  they  were  made. 

I  venture  to  say  that  there  are  few  cases  where  ttif! 
costs  in  one  m'ning  district  can  be  taken  for  granted  as 
fitting  some  other  camp ;  and  where  grave  mistakes  are 
sometimes  made  is  in  assuming  this,  when,  as  a  tact,  ma- 
terials of  all  kinds  may  cost  from  two  to  three  times  as 
much  in  a  new  region  as  in  some  favored  region  which 
the  engineer  making  the  'finding'  may  have  in  mind.  In 
fi.guring  on  probable  costs  the  greatest  care  should  always 
be  u.sed,  and  the  fact  borne  in  n.ind  that  mining  and  mill- 
ing costs  that  can  be  closely  approximated  do  not  consti- 
tute the  sole  expense  of  exploiting  a  new  orebody ;  but 
prospecting,  dead  work  and  general  expenses  have  to  be 
taken  int'  account,  for  they  often  amount  to  as  much  as 
do  mining  and  milling.  Especially  is  this  the  case  with 
small,  irregular  lodes  and  orebodies  of  irregular  shape. 

I  hope  tiiat  this  letter  may.  at  least,  cause  some  one  to 
take  issue  with  me.  thus  enlarging  the  discussion  on  such 
a  vital  subject ;  or  if  not  worthy  of  such  attention,  that  it 
will  bring  out  the  latent  knowledge  of  some  well  informed 
co-workers  who,  because  it  all  seems  so  simple  to  them, 
refrain  from  giving  valuable  experience  to  the  profession 

^'  ^'''^'-  E.  A.  H.  T..VVS. 

Fuertc,  Sinaloa,  Mexico,  February  '.6,  1905. 


THE  COST  OF  MIXING  377 

SCM  MAin.* 

Total   prdduction   for  year $2Sn.jqy.27 

Total    expenses    for    year 186,24^.14 

Difference     $94,554.23 

What  conctntrate     wtaild  proiiuce   net  by  shipping    7»t-95 

$95,266.18 

Less   gold    purchased    (iuring   year..... 1,172.19 

Net   profit    for   year,   assay   rroduction     $94,091.10 

Net  profit  for  year,   actual  returns  from    bank    $93.757'65 

*  See  table,  pp.   374-5. 


SOME   PUMPING   DATA 

Bv  K.  GiLMAN  Bkowx. 

(May    18,    1505.) 

The  following  figures  have  been  collected  from  records 
kept  at  the  Brunswick  mine,  Grass  \"allcy,  Cal.,  during 
the  fall  and  winter  of  1903-4.  In  the  previous  year 
an  extraordinary  How  of  water  was  cut  on  the  1,250-ft. 
level  (1,017  ft-  vertical  depth),  which  quickly  drowned 
the  Cornish  pumps  by  which  the  mine  had  been  pre- 
viously drained.  The  water  raised  to  the  700-ft.  level 
(505  ft.,  vertically,  below  the  collar  of  the  shaft  and  376 
ft.  below  the  drainage  adit),  and  was  there  held  by  the 
[::-in.  plunger  of  the  Cornish  system. 

The  problem  of  unwaterirg  presented  some  complica- 
tions, chief  among  which  was  the  small  size  of  the  shaft 
compartments,  which,  in  the  upper  and  older  part,  were 
32  by  39  in.  clear.  This  precluded  the  use  of  large  sink- 
ing-pumps and  finally  led  to  the  selection  of  the  air-lift 
for  the  actual  unwatering,  lack  of  efficiency  being  of  but 
small  moment  when  compared  with  the  advantages  of- 
fered in  compactness,  simplicity  and  small  first  cost.  The 
use  of  the  air-lift  for  the  work  was  first  suggested  by  E. 
A.  Rix,  of  San  Francisco. 

The  general  scheme  for  freeing  the  mine  of  water  and 
installing  a  permanent  system  was  worked  out  as  follows: 
Starting  from  the  rate  at  which  the  flooding  water  had 
risen  in  the  shaft,  it  was  determined  that  the  permanent 
system  should  i;ave  a  maxinitun  capacity  of  500  gal.  per 
min. ;  a  pump  of  that  capacity  was  to  be  installed  at  the 
700-f«.  !'/vel  anrl  the  water  lowered  from  that  hori7r)n 
with  an  air-lift  to  the  qno-t't.  level.  There  an  auxiliary 
pump  was  tn  he  placed,  and  the  water  again  Iowck  1  hv 
the  air-lift  to  the  1,000-ft.  level.  Here  a  second  perma- 
nent piniip  was  to  be  placed,   discharging  to  the  700-ft. 


PUMPIXG  DATA 


379 


icvel.  P.clow  the  i,ooo-ft.  level  the  unwaterin.t,^  was  to  he 
contimiefl  as  far  as  pos>ihle,  a  pump  station  to  he  cut  out 
and  the  auxiliary  pump  to  he  removed  to  it.  the  remaui- 
iufr  distance  to  he  freed  hy  the  air-lift  again,  assisted  hy 
a  small  sinking-pump  and  hy  hailing. 

The  event  showed  that  the  capahility  of  the  air-lift  had 
heen  underestimated,  for  the  water  was  lowered  with  it 
from  the  700  to  the  i,ooo-ft.  level,  and  there  held  for 
five  weeks  while  the  second  nump  was  heing  installed. 
During  this  period  of  installation  the  lift  was  handling 
25.6  cu.  ft.  per  min.  to  a  vertical  height  of  288  ft.,  with  a 
suhmersion  l)elow  the  surface  of  the  water  of  152. 

Air  Lift.~Thv  air  was  supplied  hy  a  pair  of  duplex 
single-stage  cnmpressors.  driven  hy  electricity,  and  giving 
a  united  disi)lacement  of  9.()i  cu.  ft.  free  air  per  revolu- 
tion. The  speed  was  constant  at  i  !0  rev.  per.  min. 
These  compressors  were  jilaced  50  ft.  from  the  collar 
of  the  shaft,  and  delivered  the  air  through  a  receiver  and 
a  4-in.  air-column  to  tlie  mine.  The  column  for  the  air- 
lift was  of  7-in.  tuhing,  with  flange  unions,  and  it  was 
lowered  down  the  shaft  on  skids  sliding  on  the  track  of 
the  skipway.     The  interior  air-pipe  was  2  inches. 

The  following  tahle  gives  the  record  for  a  part  of  the 
unwatering  period,  arranged  in  a  decreasing  .series,  ac- 
cording to  the  ratio  of  suhmersion  to  lift.  By  ■suhmer- 
sion' is  meant  the  vertical  depth  of  the  hottom  of  the 
air-pipe  helow  the  surface  of  the  water,  and  hv  'lift'  the 
vertical  height  of  the  discharge  ahove  the  .'surface  of  the 
water.  'I'ree  air'  is  assumed  to  equal  the  displacement 
of  the  compressor  cxlinders. 

The  datn  giv -n  in  the  tahle  on  page  380  seem  conflicting 
hut  thev  nidicate  clearly  the  change  in  efficiencv  of  air- 
lift work  due  to  increasing  submersion.  The  power  con- 
sumed was  determined  hv  meter  readings  over  extended 
periods,  and  includes  all  the  mechanical  losses  in  the 
compressors  and  pipes 


380 


77//:  ncOXOMICS  OF  MIX/XG 


Subscijucntly  ;i  4-iii.  culiinin  and  i-iii.  air-pipe  were 
used  below  llie  1,000-ft.  level,  with  the  results  j^iven  at 
the  foot  of  the  table.  This  was  more  in  the  nature  of  an 
experiment  than  anything  else,  and  showed  clearly  the 
unsatisfactory  operation  under  such  an  extreiue  condition. 

As   the   final    result   of   the   experience   gained   in    this 


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work,  it  can  be  conceded  that  constaiu  volume  of  com- 
pressor delivery  (that  is.  constant  speed  of  motors),  and 
fre(|ueiit  changing  submersion  and  lift  are  not  conducive 
to  economical  wrk;  exact  adjustment  of  air  vol- 
ume and  pressure  to  submersion  and  lift  are  essen- 
tials fcir  good  efiiciency,  and  under  the  conditions  usual 
in  work  of  this  kind  arc  not  obtainable.  For  regular  air- 
lift work,  as  from  dqep  wtlls,  32  to  357^  is  spoken  of  as 


fi 


PUMPIXG  DATA 


381 


(juite  within  the  range  of  possibilities.  Notwithstand- 
ing the  low  efficiency,  however,  the  method  proved  itself 
highly  useful,  and  cost  less  in  power  and  plant  combined 
than  any  other  that  could  have  been  applied. 

Electric  Piiiup. — The  electric  pumps  adopted  for  this 
installation  were  if  the  Aldrich  type  manufactured  by 
the  Allentown  Rolling  Mills.  The  tw.  ..ain  pumps  were 
5-plun,L;er,  single-acting,  6-in.  diam.  by  i2-in.  stroke,  with 
a  rated  displacement  of  66.7  cu.  ft.  per  min.  One  of  these 
was  placed  at  the  700-ft.  level,  before  the  unwatering 
was  commenced.  Ft  was  driven  by  two  40-h.  p.,  440-volt, 
induction  motors,  through  a  single  set  of  reduction  gears. 
The  other  pump  was  a  duplicate,  except  that  it  was 
driven  by  one  50-h.  p.  motor.  The  respective  heads  for 
these  pumps  are  376  and  290  ft.  The  au.xiliary  pump  was 
of  3-plungcr  upright  type,  driven  by  a  40-h.  p.  motor. 
The  current  was  brought  into  the  mine  by  lead-covered, 
armored,  three-conductor  cables.  As  originally  installed, 
the  cable,  as  far  as  the  700-ft.  level,  was  of  a  carrying 
capacity  of  No.  1  wire  B.  &  S.,  and  below  that  level  of  No. 
3  B.  &  S.  It  was  found,  however,  that  the  lack  of  radia- 
tion caused  a  dangerous  rise  in  the  temperature  of  the 
upper  cable,  and  it  was  accordingly  reinforced  l)y  the  ad- 
dition of  another  one  of  No.  2.0    arrying  capacity. 

Under  t'ull  load  these  pumps  have  given  a  power  effi- 
ciency of  72.2,"^.  ha-ied  on  a  ioo7c  displacement  of 
the  plungers.  The  actual  displacement  of  the  plungers 
has  been  shown  by  tests  to  be  ()4.5'/'  of  the  theoretical, 
so  that  the  actual  horsepower  in  water  handled  is  69% 
of  the  power  dclivercil  to  the  conductors  at  the 
collar  of  the  shaft.  This  includes,  besides  the  conductor 
loss,  two  series  of  lamps  in  the  pump  stations. 

Cornish  Pinups. — The  Cornish-pump  system  presents 
the  following:  Stroke,  6  ft.;  ma.ximum  strokes  per  min., 
85 :  T  plunger.  14-iii.  dinm  .  iukKt  12S  ft.  head.  400- ft. 
level;  i  plunger,  12-in.  diam.,  under  250  ft.  head,  700-ft. 


382 


Till-.  r.COXOMICS  Of  MJMXa 


Icvd;   I   i-Iunj^ir,   ij-iii.  (li.iin.,  under  aS;  ft.  liuad.   1,000- 

ft.    k'vti;    1    pIuuyiT,    12-iii.   diain.,    under   j^u    ft.    lic:nl. 

1, 250- ft.  level. 

The   iiiuii[>   is   driven   hy    water,   inuler   j88    ft.    kiiietic 

head,  the  tir.st  .-peed  reductidii  hein«  I>y  belt  and  the  sec- 
ond hy  gear.  The  rod  is  of  Oregon  tir,  12  hi.  sq.,  and  is 
supported  hy  njllers  in  the  customary  fashion.  There  is 
an  angle-lx)b  ;it  the  400ft.  level,  whc're  tlie  siiaft  changes 
dip.  and  an  ordinary  counterbalanced  operating  boh  on 
the  surface,  hesi<les  a  balance  boh  at  the  (joo-ft.  level. 

'l"he  data  following  are  for  the  month  of  February. 
1904:  Horsepower  in  motive  water.  t8i  ;  iiorsepower  in 
water  thrown  (on  basis  of  full  displacement).  65;  ap- 
parent efficiency,  on  same  basis,  53.7'; .  The  actual' water 
thrown  amounted  to  but  75';  of  the  .lisplacement. 
because  of  the  necessity  of  drawing  back  water  from  the 
columns  into  the  pumps  for  considerable  periods,  in  order 
to  keep  the  jjumps  'solid.'     This  is  automaticallv  done  bv 


'siphons,'  and   no  special   measurements   were 


floats  am 

made  to  determine  the  actual  displacement  efficiency. 
This,  however,  with  such  slow-moving  parts,  should  cer- 
tainly be  above  95''r.  with  valves  and  packing  in  good  con- 
dition, giving  51';;  total  efficiency  for  the  pump.  There 
is.  however,  a  further  loss  due  to  the  stretch  of  the  rods 
and  to  lost  motion.  In  this  case,  at  the  1,250-ft.  level, 
this  has  been  determined  to  be  3I  in.,  or  4i  per  cent. 

A  mcist  serious  drawback  to  the  use  of  the  Cornish  sys- 
tems of  pumps  lies  in  the  point  touched  upon  in  the  last 
paragraph  :  The  fact  that  all  the  plungers  must  operate 
at  the  same  speed,  and  with  practically  the  same  length  of 
stroke,  makes  imperative  the  drawing  back  of  some  water 
to  make  up  deficiencies  at  some  of  the  [jumps.  The 
plunger.  h(nvever,  so  long  as  it  is  raising  to  the  next  lift, 
IS  doing  its  work  against  the  full  pressure  the  whole  time,' 
even  though  nine-tenths  of  its  water  is  being  drawn  back.' 
This    is    inherent    in    the   system,    and    can    no   more    be 


ri'MPIXC  P.  IT.  I 


383 


avoided — thoupli  it  may  he  minimized— tlian  tlic  cliani^e 
in  the  rate  at  whicli  water  'makes'  in  ilie  various  levels 
can  he  prevented. 

It  wnnld  he  intcrcstinc:  were  data  at  hand  for  similar 
work  by  other  styles  and  systems  of  pumps,  but  it  seems 
highly  imprnbahlc  that  efficiencies  as  hiph  as  69'^^  can 
he  -btained  hy  other  than  those  electrically  driven,  with 
the  possible  exception  of  pumps  using  re-heated  air. 


t 


THE  COST  OF  MINING 

(.\Iay    .'S.    1905.) 

The  Editor: 

Siu — 1  am  a  reader  (if  your  \alual)le  Journal,  and 
derive  i)leaMire  ami  |irntit  ilureliw  Among  tlie  many 
thiiif^s  uf  itUerest  it  eontait'.^,  to  me  there  are  none  more 
so  than  tlic  reiKirt>  of  the  cost  of  muiiiij;;  hut  in  those 
reports  we  are  never  told  what  the  cost  is  of  those  articles 
that  make  \\\)  the  per  ton  cost;  hence,  as  comparative  fig- 
ures, they  are  not  very  relialile.  There  is  a  great  dilTor- 
ence  in  the  price  of  mining  su])plies  if  hought  in  large  or 
small  (|uanlities.  So  al.so  do  the  hours  and  wages  paid  differ 
in  dill'erent  localities,  as  do  all  other  conditions  atTecting 
the  character  of  operations.  In  giving  those  reports  to 
the  puhlic,  the  character  and  h.ardness  of  the  rock  shoukl 
he  given,  as  well  as  cost  of  mater'al ;  in  fact,  all  things 
that  add  to  the  final  expenditure.  The  mine  owner  reads 
the  re])ort  perhaps  as  keenly  as  does  the  mine  superinten- 
dent, and  if  it  happens  that  he  has  hail  similar  work  done 
on  his  propertv  at  a  ji^reater  cost,  he  will  wonder  why  his 
man  could  not  do  it  as  cheaply  as  the  other  fellow,  and 
thus  many  a  gcx^d  man  uiay  get  'knocked.' 

'ihis  report  i^  not  intended  as  an  example  of  how 
cheap  this  kind  of  work  can  he  done  (it  cost  $13.50  less 
per  foot  than  the  previous  Joo  ft.),  hut  is  more  in  the 
n.ature  of  a  memnrandimi  for  the  yoimg  mine  supcrin- 
ten<leiit  who  may  not  have  had  the  experience  in  shaft- 
sinking. 

(.)ur  supplies  were  shipped  from  Rutte,  30  miles  by 
rail,  thence  S  miles  I)\-  wagon  over  a  rough  mountain  road, 
grade  200  ft,  to  the  mile.  When  we  started  work 
on  the  '-halt,  it  was  already  down  650  ft.  The  work  in- 
volvetl  in  getting  ready  to  sink,  such  as  placing  the  sta- 
tion pump  in  ;i  proper  place,  jjiuting  in  a  hulkhcad.  and 
cleaning  out   the   mud — (S  ft.   •  f   it — from   the  bottom  of 


run  COST  Ul'   MIX  ISC  ?.K^ 

tlif  sliaft,  cost  over  $J(xj,  which  was  I'luirjii^cd  tip  to  the 
(.•(  >^t  ptT  foot  nf  siiikinL;'.  1'hc  sizo  of  the  shaft  whtTf  wt* 
.started  is  (>  ft.  I)y  4  ft.  6  in.,  the  new  work  is  9  ft.  hy  4  ft. 

Supclu-s    f.'T    SmKiii^   SI  aft    J14    Feet. 

4    kens    inrl    nnils u,  $  t  *  .1 '  i  S'vSS 

Ji    r.-uiiil  it.iiiit    siiu\il>    "  U.84  "7-t»4 

-ij6    H    hy   8  in.    Uk   sirrws "  5.50  i^.gS 

20    lb.    ^-in.    cut    washers "  ....  1.50 

4   plum    bobs *•  ....  ^.00 

2(to  fcft  plumb  line *'  ....  o.aj 

6    mine    tnrclies    "  0.75  4-5o 

Wilkin^    fur    turches *'  ....  o.i  5 

.ino     II)    I  in.  rnumi  soft  strcl  fi)r  hanginK  Holts  "  3-40  10.20 

4K    1  in.   Sf'iiare   iiut>,    44   lb "  o.oyYi  3.30 

48    1  in.  cast   washers,  jj   lb "  0.05  1.60 

g    axe    harnHts    "  0.35  3.15 

2    axes    '*  0.8s  1.70 

2    <I(>z.    pick    liaii'ilt's "  0.27  6.48 

1    (i(i7.    ,V>-iu.    sk-tJKr    handles '*  0.21  1.52 

loo   lb.    axle   iirrase^ — fi»r  cartri(!i;es '*  0.116  6.00 

415   Ih.   of  2  Ih.    r   raiis — for  Surface  track..  "  2.75  11.42 

50    lb.    track    spik<-^ "  0.04  j.oo 

2.345    11»-    blacksmith's    cual "  *').so  "9-.5S         $ijo.j9 

1SV2    boxes   candles — 2040    SnnwHake '*  j.on  $55-5')           $55-5o 

2.600    lb.    powder — Kepauuo   gelatine "  14-25  37'>-5" 

10.700   ft.    triple   tape    fuse "  0.46  40.42 

2.40Q    caps — F.ion    Iiran<i "  0.75  iH.oo           437  qJ 

5n,rino    ft.    timber    and    plank "      17.50  $875.00 

Tlie  r.itio  of  plank  and  square  timber 
u^cd  was,  M(uare  timber  55-36^;  j-in. 
plank.  44.64%. 

Labor. 

Blacksmith.     57    days (it,     $4.00        $22S.no 

Blacksmith    helper.    24 !  4    days "       3.00  7-75  300.75 

Carpenter,    77    days "  4.5<i                              $346.50 

Superiiitetuient     556.92 

Contractors    3.424.00 

I*uni[  iu^    and    hoisting   account i.i>i6.o5 

Plant   maintenance   and    ad  Jitions   account 5,M  "9 

$8.567.7» 

Hardware    supi'lics    $0.561016  per  foot 

Cardies     "■-^5'JJ45      '"      " 

Aninnmition     ^"46355 

Timber — c  xce'-t    ijiiidcs    4. 1)887  "     " 

I'umpinK   and    Iioislnig   account 8.95^5  '*     " 

!*Iant   maintenance   and    additional    account.  ...  2  igS6  " 

Blacksmith    wcrk    '  4   5374     "     " 

Carpenter    work     1.6,91'*        "     " 

Superiiiten<!ent      2,60  "      " 

Contract    price    16.00  '*     " 

$40. O.J  "       " 

10  in.,  all  timher  lo  hv  lo-ln  tlr.  I-'nr  linj^tint:;"  tlic  rock 
we  used  a  bucket  with  the  Ijail  pivoted  Iielow  the  center, 
and  for  lack  of  heii;ht  under  the  sheave  it  was  hun^i^  just 
2  ft.  under  the  cage;  to  tkur.p  it   we  hinged  a  door  on 


;!n; 


nil:  i:C().\().\ncs  or  mim.w; 


tlic  opposite  sido  of  tlic  shaft  fnitu  tli.ii  on  ulii.li  wc  caged 
tlie  t-ars;  on  this  dMor  we  placed  ilie  car  and  dumped  the 
rock  into  it   irom  the  limkct.     W  i-  n-ed  the  ea-r  t"  liucr 
and   h'MM   mm.   aNo  t,,  li.ijst  nick    I'nan  the  400  it.   level, 
ulnre   we   hail   iwd   -liifts,  of  two   men   each,   ruiminf,'  a 
dnit      \\  iiilr  the  innu-  made  cnnsiderahie  water,  tlie  shaft 
\\a>  i|mtc  Ircr   Iri  m  it;   what  there   was  rame   fn  in   near 
the  Min.aee  and  amotmted  lo  50  i;;d.  jjer  hour,  which  we 
i)"iMid  to  the  (100  ft,  -'atiMii  and  dnmpeil  it  into  a  launder, 
whi.h   carried   it   tn  ilie  mine  vtittip.      We  sl.irted   to  sink 
X'>venilier  _•!),  and  fniidieil  I'ehrtt.ary   H)      'rii,-  shaft  hein- 
\^>'I   "I    the   li:o|   \uill   lln'   uranile   wa^   ver\    h.ird    for    Kio 
ft   :  the  niiiainder,  while  it   was  '^>^ut\  Miff  i^roimd.  hroke 
Will.      Ihe  contract  jirice  was  .Si()  per  font,  the  (■■inipanv 
fiinii.shini,'  all  material;  there  were  four  contr;ictor-..  who 
employed  ei^lit  oilu  rs,   tlin-  making;    fmir  men   ju  r  >hiit. 
We  used  two  \)-;t,2  In-ersoll-Sert^ermt  nck-drilK.     When 
scndin;,'  np  r.  ek,  ..tie  (if  the  vkaft  nun  acted  as  top  car- 
man, for  which   1  .allowed  the  contr.actdrs  S.V5')  per  -liifl  ; 
tin's  man   .aNo  handU.l   tlu'   rock    from   the   drift,   --,,  th.it 
when  there  was  no  n-ek  comiiiLr  out  of  the  sh:ift    we  had 
no  top  m;m   in   p., v.      We   found   this  iilaii   adv;mt;ii;enns 
h'  th   to  the  company  ami   contractor^,   fnr  the   man    that 
\\nrki'd  nil  toj)  e.f,t  $4,  the  same  as  the  men  on  the  hottom. 
lieiice  he  ernt  a  'ninve  on  him."     The  rlistance  sunk — 214 
ft.rJ'Sir)— cost  S3.424:  to  whici  :u]i\  $t,-^j  fnr  top  c;irman  ; 
(lividiti!,>-  hv  8O4.   the  numher  nf  shifts.   ,c:ives  ^4.^7   jht 
shift  per  man.     The  top  work  was  charLred  to  piimpiiiL,' 
and  hoistintr  account.  t  it 

J.\.Mli.S    1 1  I'M  lis. 

i'.asin,  Moil.,  May  15.  1905. 


THE   COST  OF   MINING 

(l.'lu.irul.    June    .■!.      V       ) 

1  lir    ci.Tiiriljtiiinn.,    to    tlii>    i!i>cii>>i.iii    have    nut    been 
iiuiiunni-,  liiit  ilu\   lia\c  Cdiiic  li.  im  hk-ii  i-iititltil  to  .s|K-:ik 
Willi  aiulinrity,     (  )ii  tin.  tiiaiii  \»,u\\^  tlurc  has  him  jirar- 
tical  iiiiatiiiiiily  ;    Pr   in>tami-.    the   imd  (,i   a   .siinpk'   hut 
coiiiprihfusivc  .■.y>t(.in  of  ai.-C(Jiim.s  and  ilu-  stihoriliiialioii 
of  the  cost  <if  iniiiiii.L;  to  ihc  vital  (|iK'siioii  of  profit  pix 
ton  of  ore.     Aiiinui,'  ihr  laiiors  wiiidi  fxplain  the  iiiarkcil 
clillerences  of  (.-o.-t  niadt.'  apiianiit  hy  the  rep.  irt.-,  of  min- 
inj,'  comijauies,  two  are  speeiall\'  iiutahle  ;  we  rel'er  to  the 
effect  of  sortiii';  and  the  eflicieiicy  of  lahor.     In  districts 
where  niiiiiiii,^  .prraiioiis  f, -Hmu  small  and  irrr-iilar  seams 
of  ncli  ore  scattered  thmii-h  a  lari;e  tiia-s  of  tnalerial  of 
low  },Tadi',  it  is  a   finidaiiK  tita!  prohleni  whether  to  work 
the  rich  ore  sei)arately,  ohtainin,!,-  a  clean  hiirh--;rade  prod- 
uct, or  to  hreak  dow  n  tin-  entire  mass  of  minerali/ed  loile, 
with    siihse(|Uent    snrtini,^   at    surface.       It    i^    a    (|iiestion 
whether  the  maxiniutii  [jmht  can  he  secured  he  hreakiii.t,^ 
the   r\ch  streak   hy  itself    (tli:       s.  to  'resue')    (jr  to  min- 
imize the  cost  of  hreakiii!;-  hy  takinj,^  the  itill  widlli  in  one 
blastini^  operation.     In  the  one  case  the  e.\[)ense  incurred 
underground  is  ,i;reater  :  in  the  other,  sortint;  su[)ervenes 
at   surface.     The  clmice  of  methods  will   dejiend  larj^eh,- 
upon  the  contents  and  chriracter  of  the  c.\tra  width  of  rock 
broken  down   with  the  main   ore-streak.     Here   is  where 
the  'cost  of  mim"n.L;'  tremhles  in  the  halance.     I':acli  case 
must  be  worked  out  individually,  accordinj,^  to  particular 
conditions;  and.  in  the  weipliinj,::  <~'^  the  factors  atTectini: 
thc  final  profit,  there  comes  the  test  of  jrnod  management. 
The  (|uality  of  the  labor  employed  i>  another  basic  fac- 
tor.     It  is  hardly  realized,  by  shareholders  and  directors, 
how  great  a  difFerence  in  the  cost  of  mining  is  created  by 
ineflRcient    labor.      In   this    respect   the   mines   which    are 
able  to  use  the  contrnct  ';v^tf"7i  um]  ihr-.^i--  -.i-t-.:.-i-.  --.-.  r, 


I 


:tss 


////;  lA  (J.\()M1LS  t)l-  MIMXd 


frniii  till-  mnniiHi^i. lit  iMaiiii\  "I  ;lu  niiiur>'  iinimis  have 
a  K''*'''  aihaiitaj^i-  (i\ir  tlinsi'  that  .iri'  (|"iiunattil  li\  walk- 
iiiK '''■'I'K'''*^'"' •""' •"''•^■""'I'*'"'^'''  '"  I'li'l''".''  <iii>l<ill>iil  wnrk- 
iiit'ii  at  (lays  pa\  '  I  1ms  tlii'  Jujiliii  ami  tliu  I'lat  Kivir 
(listriits  ill  Missdiiri  allurd  a  >iriiii^'  iniitrast  Aiiihhl; 
(itliiT  aspi'i'ts  of  till'  laliiir  ]in.l)k'iii,  it  is,  ui-  tlii:ik.  a  safe 
j,'cmralizatiiiii,  that  iiiiiic  u])ti',iti]r>  timl  it  I'cniiniiiKal  to 
niaki-  the  i)est  nf  \\hatcver  native  lal">r  nia\  he  availahle. 
In  Kurea,  in  Mexim,  m  riiinna.  in  iiin^t  enuntrie>  wlure 
the  natives  ean  he  trained  tn  dn  the  wnrk  in  iniius,  it  is 
eheaper  to  ediieate  liicin  tn  the  Aiiieruan  or  luimpcan 
iiiethnds  than  it  is  to  intnidiKe  thi'  hi^h-])rice(l  \v<irknien 
of  more  advaneid  oomnnmitie^,  huaiise  the  extra  skill 
seeiirt-d  therehv  is  rarely  eompensation  lor  tin.'  eliniatic 
ctteets  on  foreigners  and  the  di^pi'iidenee  upon  men  who 
eannot  he  replaeed  save  with  f^reat  loss  of  time  and  the 
ineiirrinj^  of  a  one-sided  ohli^^ation.  In  all  eomparisons 
initiated  hetween  workiiijj:  eost>  obtained  under  labor  con- 
ditions so  diverse  as  those  of  thr  L'nited  States,  South 
Africa,  Mexico,  and  Western  Australia,  it  is  necessary  to 
have  rej^ard  to  this  factor. 

In  a  recent  i>sue  Mr.  I'hilip  Argall  made  some  perti- 
nent remarks  concerning  the  ability  to  discover  ore  in  a 
mine  as  being  at  least  as  precious  as  that  of  keepin;,'  down 
the  costs  of  operation  after  the  ore  has  been  found,  lie 
([noted  an  instance  the  identitv  of  which  it  was  nut  ditti- 
cult  to  recognize.  L'ndoubtedly,  skill  in  seeking  ore- 
bodies  is  one  of  the  most  ditticiilt  to  appraise,  because  it 
must  be.  to  a  large  extent,  dei)en<lent  upon  accident; 
nevertheless,  it  is  well  'or  those  in  control  of  mines — 
especially  such  as  maintain  an  expensive  organization  — 
to  realize  that  no  ([ualits  is  so  directly  contributory  to 
lirofitabie  mining  as  the  instinct  or  experieiiee  that  enables 
a  superintendent  to  follow  the  ore  or,  when  it  nils,  to  pick 
up  a  new  trail  of  ore  deposition.  That  is  why  'tributers' 
,  .-  1.... ,,,.,1. ,  ..V.N...,.;...,  .,,;.,.,  ...Ti-wr.  >,,„>, 1  i,„A-  cUiif 


/■///:  {  ns7'  ()/•■  Ml \ IXC 


:\m 


wIu'Ti  llu'v  i.ikt  ci\t  r  a  iiiiiu  vuppi^ci)  tn  lic  ixliaii'-ti  il  ami 
f(]rtlu\iih  iiiKn\tr  valuahlf  ciri'-s!ii»it^  (  iicasiniially.  tln' 
iiii'rra>i'  in  i'Ht|iut.  i-niiicidcnt  witli  tlii  trilmttr's  rr;,'itiu'. 
is  traccalilc  tn  |ia!ilus  nf  ni.li  c  n  liidiKii  liy  miiuTs  pn- 
viou-lv  nil  ilax's  pay";  hut.  as  a  rule,  it  is  simply  the  ri'- 
sult  nf  tlu  initiative  di -played  hv  men  who  are  no  Imii^er 
working  fur  a  ecmpan).  htit  fnr  ihemselves.  Any  mrtlmd 
of  maii;i;;enii  tit  which  utilizes  this  characteristic  of  hu- 
manity is  likely  to  induce  economy  in  the  cost  of  op- 
eration. 


! 


! 


! 


DEEP  MINING 

U'-tiiiMria!,   June    i.    iyu5.) 

The  fiiidiiitj  of  !,'()Id  at  4  lOi  Ret  in  a  iJondigo  mine  is 
afTorcling-  suhject  Inr  Cdmnmit,  in  .\u>tralia  particularly. 
Murchison's  dictum  reyanling  the  nun-[)er>istence  of  gold- 
quartz  veins  is  re^iUTected,  and  that  worthy  j^eoloj^ist. 
hut  unfnrtunate  geiieralizci  on  minni;4  mattei's,  is  hekl  up 
to  ridicule.  When  .Murchison  wrote.  50  \ears  ago,  gold 
mining  afforded  no  data  for  large  statements  regarding 
persistence;  and  e\en  today  the  discussion  of  the  subject 
is  academic  unless  it  is  tieil  to  the  ecnnomic  aspect;  in 
other  words,  veins  may  or  may  not  pcrsiyt  to  deiuhs  be- 
yond man's  reach;  the  t-ii:  is,  that  man  will  make  no 
efifort  to  f(jllow  them  if  they  do  not  pay.  It  is  the  prob- 
lem of  the  persistence,  nut  ol  gold-quartz,  but  of  pay  ore. 
Thus,  i)ur  esteemed  contemporary,  the  .■instrolian  Mining 
Standard,  sa\s  that  "the  ([Uestion  (of  depth  in  mining) 
is,  of  course,  largely  guverned  by  the  cost  of  working." 
It  is  i\.'hoUy  governed  by  it ;  mining  is  nut  a  scientific  pur- 
suit, but  a  money-making  busniess.  based,  of  coursi'.  on 
the  application  if  scientihc  knowledge.  That  is  why  emi- 
nent geologists  occasionally  go  astrav. 

It  i.s  inlerestiiig  to  knnw  that  (juart/.  carr_\ing  native 
goki,  pnibably  in  cciarse  particles  visible  to  the  eye,  has 
iieen  intersected  by  man's  burrowing  at  a  depth  of  three- 
(}uarters  nf  a  mile:  but  this  dt)cs  n(.it  inijily  profitable  min- 
ing at  that  depth.  The  or^  in  the  .W  w  Cluun  Railway 
mine,  at  I'.endigo.  was  cut  liy  a  winze  su'ik  305  ft.  below 
a  ci,)sscut  at  .^,^!56  ft.;  the  discovery  is  the  result  of  ex- 
pensive exploration.  Tlie  last  prolitable  mining  was  at 
3,350  ft.  We  (question  whether  the  orelx)dy  will  prove 
remmierative,  simply  because  we  are  aware  that  mining 
at  I'.endigo,  or!  the  whole,  has  n,,t  been  profitable  liclow 
2, .SCO  ft.  or  e\en  at  a  shallower  horizon,  (lesj)ile  oc- 
casional patchy  discoveries  and  a  few  orebodies  of  such 


DEEP  MIMXG 


;{!ti 


(Iliiieiisions  as  tn  pay  spasmodic  dividends  wliitdi,  while 
tliey  liave  lasted,  ubjiterated  the  iiieiiKiry  of  a  nnich 
li)iij,'er  series  nl  ealls.  I'^ven  in  Si>utli  Africa  the  romance 
of  an  indetinitel)  (Ivvy)  search  fnr  the  'liaiiJvet.'  through 
shafts  planned  to  t;ii  from  one  to  two  miles  deep,  has  paled 
of  late.  It  is  recot;ni7.e(l  that  the  protitahle  character  of 
the  'reefs'  decreases  in  deptii.  As  u  e  >ai(l  two  years  ai;(j, 
e\en  .Metlni-elah  died.  It  i>  as  well  tn  j^et  alnn^side  of  fact  : 
the  more  mone_\'  is  wasted  on  academic  theories,  the  less  is 
available  fur  smind  miniiij.^.  Meanwhile,  observant  men 
no  loiiLTcr  repeat  the  fallacv  of  enrichment  i  i  depth,  or 
even  nf  indet'mitc  persistence  of  pay  ore;  hut,  recogniz- 
ing,' comlitions  as  disclosed  in  world-wide  mininjj,  they 
are  cxtendini^  the  horizon  of  profitable  operations  by  re- 
diicinii  costs.  In  1850  a  lode  woukl  have  been  consid- 
ered "plaNed  nut'  if  the  yield  decreased  from  5  nz.  of  Ljold 
at  surface  to  j  oz.  at  200  ft.,  because  it  would  then  have 
ceased  to  be  profitable.  Twenty  years  ago  people  were 
glad  to  begin  with  a  yield  '>f  an  oimce  :  and.  if  the  ore 
reached  to  i.tx)0  ft.  before  it  fel'  to  half  an  ounce,  they 
were  well  satisfied.  Nowaday;  we  can  go  dee]x-r :  and, 
though  the  diiuiniuion  cnntiinies.  we  can  snatcli  profits 
from  material  yielding  less  than  a  cpiarter  of  an  ounce, 
thereby  extending  the  ecnnomic  horizon  another  i  .OOQ  ft. 
This  is  merely  an  illustration,  but  something  of  the  ^irt 
really  does  occur  in  practical  work :  and  it  suffices  to 
emi)h;isize  the  conclusinn.  that  if  \  on  waiU  to  know  .anout 
the  structural  peculiarities  and  distribution  of  ore  in  a 
loilr,  yrui  do  well  to  ask  tlie  ge(ilogist ;  if  \'OU  want  to 
know  whether  a  mine  will  pay.  and  how  long,  you  had 
better  ask  the  man  wIkj  has  managed  mines. 


NOTES  ON   MINE   REPORTS 

IJV  CULolLK    1".   LhE. 
(June    8,    1905.) 

General  Principles. — A  rv\)on  should  ho  clear,  ikfmito 
and  complete.  Want  of  clearness  in  statement  is  a  fatal 
defect,  .\lndd_v  statements,  confusion  of  ideas  and  run- 
niuj.;  one  suhject  into  another  are  worse  faults  in  this 
class  (if  uritiiit,'  than  any  other.  Clea!  expression  results 
from  clear  thought,  l^veryth.int;  si  juld  he  fi,<,'ured  nnt 
and  thou.uht  out  heforehand.  all  .!  I)ts  settled,  and  then 
a  statement  made  in  as  few  and  simple  words  as  mav  he. 
All  that  is  to  ho  said  on  any  one  head  should  he  said  at 
ono  place:  jjart  of  a  suhject  in  one  place  and  part  in 
another  leads  to  confusion.  Detinitoness  is  equally  os.sen- 
tial.  Hazy  and  amhiguoiis  statements  as  tfi  essential 
points  are  inadmissihie.  They  are  si,i;ns  of  incom()elenco 
or  a  desire  to  mislead.  .\  man  who  knows  his  husincss 
and  is  honest  will  make  statements  in  a  form  that  cannot 
bo   misunderstood. 

Many  reports  otherwise  good  are  fatally  defective  for 
want  of  some  detail  essential  to  the  complete  understand- 
ing of  the  proposition.  Judgment  is  hero  necessary  to 
distinguish  hotwoon  the  trivial  and  unessential  and  that 
which  is  vita!  and  apposite.  Xothing  can  he  omitted 
which  is  a  link  in  the  chain  of  facts  that  loads  to  the  con- 
clusions stated,  or  is  essential  to  their  clear  comprehen- 
sion :  hut  nothing  should  he  included  that  is  not  essential 
to  this  end.  I'liat  mining  is  the  business  of  making 
money  out  of  ore  should  never  he  lost  sight  of  '1  lie  oh- 
ject  of  a  report  is  primarily  coii,mercial :  it  is  a  matter  of 
business.  Such  technical  matter  as  is  neccssarv  to  clear- 
ness ami  completeness  has  place,  hut  noth.ing  further. 
The  temper  in  which  the  matter  should  be  approached  is 
judicial.  Xo  personal  bias  or  feeling  should  enter.  .\1! 
should  be  cold,  hard  facts,  and  the  conclusions  such  as 


xorns  ox  mim:  khports  -.vxi 

can  ho  just'  drawn  from  the  facts  stated.  Kvcrytliin^' 
slioukl  he  ascertained  witli  exactness,  notliiii^  j;iiessed 
at  or  left  to  chance,  and  no  stone  left  imturned  to  check 
concinsinns  in  all  possihle  ways.  Tains  taken  in  this 
last  particular  will  save  many  a  cnstlv  hlunder. 

Difisioiis. — Recjiiireini.'nts  will  varv  <;reatly,  hut  the  fol- 
lowiiifj  heads  (or  their  e(|uivalents)  will  cover  most  cases, 
and  often  many  of  them  can  he  dispensed  with.  The  or- 
der of  treatment  is  not  insisted  on: 

1.  Conclufions 

2.  Sittiaiiiiii  (Geography) 

3.  Claims   (Surface  extent) 

4.  Title 

5.  History 

6.  Orehearing  Zone 

7.  Cliaracttr  of  Deposit 

8.  Geology 

9.  Mineralogy 

10.  DcVv'lopnients   (W'orking.s) 

11.  Production 

12.  Ore   Uivelopcd 

13.  Ore  \'alnos 

14.  Trcatnnnt    ( Prorc^-  .iiid    Handling) 
I=i.  Costs  and  Proceeds 

16.  Plai.t 

17.  Working  Mftlmd.s 

18.  Assays  and  Sampling 
ig.  Maps 

20.  Miscellaneous 

21.  .Xppeiidi.x 

22.  Inde.x 

Coiuiusious. — It  is  tiic  conviction  of  tlie  writer  that  the 
conclusions  should  hi'  the  first  thint;  in  a  repo.t.  The 
husy  man  wants  to  know  tiothiuL,'  more,  and  all  readers 
get  at  the  meat  of  the  matter  sooner  from  knowinp;  the 
net  results  at  the  outset.  .\n  eni^ineer  of  prominence 
requires  all  reports  sulimitted  to  him  to  have  the  con- 
chtsions  reduced  to  the  followint;;  terms: 

Ore  zone   ft,  long  by ft.  wide  I)y   ft.  deep. 

Ore-sluK,!.--  Ill   the  above   (innnicrating  each)    ft.  long  by 

ft.  wide  by ft,  deep.     Ore  can  be  mined  for  $ 

per  ton.     Ore  can  be  treated  for  $ per  ton.     By   

process.     Per  cent  of  extraction Reiiuircs  ass.iy  value  to 

j)ay  of .Assay  value  found   


n 


:!!I4 


Tllli  l-COXOMICS  OU  MIXIXG 


Tt  is  not  pfissil)lc  m  fit  all  cases  to  so  ri,t,M(l  a  furni,  l)Ut 
it  illuslratfs  tin-  rciiiiircnu'nts  of  those  who  want  thin.s^s 
boiled  down  to  the  last  (lr^L;reo.  'i'hey  re(iuire  reports  to 
he  clear,  ciisp,  net.  C  i  inclii.-.i(  ms  shmild  he  ]uit  in  as  few 
and  clear  words  as  possihle;  tun  much  panis  cannot  he 
taken  in  niakiiiL"'  them  at  once  a  .--un'niary  and  epitome  of 
the  will  lie.  The  ci 'ncliisions.  thnii^^h  sta-idinL;-  tirst.  are 
of  course  written  la^t. 

Sitimlioii. — I'nder  this  captinn  cnme  such  ni.'itters  as 
j^'cot^raphical  Incati'in,  accessihihty.  tran.-i«)natiiin  facili- 
ties, topcij^raphy  and  climate. 

i'hiiins. — flainis  <ir  surface  extent  of  jirnperty  should, 
he  ftdly  set  lurth  complete  map  prepared.  shnwiiiL;' 

evc^y  pns-ihle  del  ■  iirface  houndaries  and  divisidiis. 

sitr\'ey  lines.  ciiutMurs,  surface  impr. '\ement<.  huildin,L;s. 
etc.     A  s;i!i:(l  set  nf  jiln  :to!.,'raphs  is  an  aid  to  I'iearness. 

Tillc. — Title  to  the  property  mider  examinatinn  is  proj)- 
erly  matter  for  a  lawyer's  opinion,  hut  if  it  i.s  mereh  pos- 
sessory. IT  rests  on  patents  or  its  e(pii\alent.  so  slate. 

History. —  I  he  .salient  pi  mts  in  the  historx  of  the  ])rop- 
erty  slmuld  he  m  \t  ^iven.  I'nints  of  f;iilure  are  often 
more  inten  stiiii;  than  tiiose  nf  snecess.  To  know  what  to 
a\oid  is  lialf-way  to  know  wh.at  to  do.  I'rojierties  of  any 
a.i,'e  are  sure  to  liave  i^one  through  several  staijes  and 
many  vicissitudes,  .if  interest  to  i!ie  pro.,peclive  inirchaser. 

(he  Z,iiic. — r,y  'i'red)e;irin!.^  zone'  is  meant  the  extent 
of  -round  in  which  ou  may  reasouahlv  he  looked  for.  .\ 
succinct  statement  of  the  i)roportion  of  the  propertv  likelv 
to  yield  a  profit  is  desirahle.  Evidence  on  this  head  is 
looked  for.  not  only  in  the  ground  in  question,  hut  in 
near-hy  property  and  throu,<;hout  the  district,  if  lit  ed  he. 

Character  of  Ih'posit. — Without  a  fair  workini^  knowl- 
edin^c  of  ore  deposits  in  general  :ind  an  intimate  act|uai'i- 
tancc  wiJi  the  deposit  under  discussion  in  jjarticular, 
iiothint::  worthy  can  he  set  down.  .An  outliiu'  onlv  can  i)e 
.L;iven  of  what  ■^uit.ahle  treatmeii'  of  this  section  reijuircs. 


XUTI.S  OX  MIXB  NUrnRTS 


:i\c, 


It  wiiHiil  iiu'luilc  tile  iiri^in  ai;il  furni  i>f  the  deposit,  the 
physical  and  .i^eoKjgical  eliaraeler  (jf  the  walls  <<r  liniitiii!; 
ehaiim'  iif  foniiatinn  nr  striietnre;  the  strike  ami  dip  of 
the  dejiiisit  :  the  oeenrreiiee  and  fre(|uenc}'  of  shoots,  ehiin- 
ne\s  or  oilu '•  enriched  areas,  their  origin,  form,  dip.  pitch, 
etc.  In  general,  it  ni.ay  he  said  that  every  characteristic, 
])eculiarit\  and  salient  feainre  of  the  oreho(l\-  should  he 
described,     i  iccasional  sketches  are  an  aid  to  idearness. 

(/r.'/i':;_V. —  i  he  essential  ])i'int.-5  of  the  local  geology 
should  he  carefully  cNainined  and  ~nccinctl\-  stated;  not  a 
scientific  treatise,  hnt  a  pl.ain  staten;.'nt  of  whatever  af- 
fects the  economic  aspects  of  the  case  is  the  thing.  Uikes, 
faults,  sli])s,  cross-courses,  change  of  formation  and  sim- 
ilar plieiKJiiuna  shonld  he  descnhed,  and  their  inllnence 
on  ;lie  size,  continuity,  mineralization,  etc..  of  the  orehod\' 
considered.  Snit.alile  map.s  and  sketches  are  helpful  in 
showing   these  details. 

Miiirriilti^^y. — 'i  his  will  comprise  an  enunieratior  of  the 
minerals  in  the  ore,  and  hi  the  gangue  and  walls;  a  dis- 
cussii'ii  of  the  chemical  .and  ])liysii..il  changes  these  min- 
erals h.'ue  undergone,  oxidations,  alteration  products,  etc. 
\'ahus  in  the  v.arious  minerals  to  he  determined,  and  a 
ditTerentiation  made  hetween  what  is  protitahio  and  what 
is  not. 

I)c:'clnpntctits.—.\  detail  account  of  all  the  workings  of 
the  mine,  with  the  results  that  have  lieen  accomplished. 
Here  again  a  good  set  of  maps  is  indisjieiisahle.  (Gener- 
ally a  \ertical  longitudinal  section  of  the  di posit  will  show- 
most  of  the  openings.  Imt  often  fre(|neiit  cross-sections 
are  necessary.  .\  map  of  the  whole  mine  in  jilan  is  the 
basis  for  this  work. 

Production. — This  i>  hest  presentul  in  tahulated  form: 
dates,  character  of  o:-c.  parts  of  the  mine  producing  it. 
values  in  the  .several  metals,  total  gross  values,  deductions, 
costs  and  the  like,  in  as  full  detail  as  is  p<issib!e.  .\  concise 
history  of  the  output  makes  the  text  of  this  heading. 


:!1m; 


Tllli  IXOXOM/CS  or  M/MXC 


()i\-  IK':r!,)f^i\l, — '(j.^  (K  m'I' ijx'd'  covers  what  used  td 
\k-  (U -i-ii.-iU'il  'ere  ill  ,siL;lii.'  II'--  i|iiniuity  of  ore  rcadv 
for  extractidu  and  ex]ici^ed  ,  .u  four  sides  sliinild  lie  li.Med 
under  'developed  ore':  uliat  i^  e\])osed  on  two  or  three 
sides  is  'prohahle  ore,'  and  everythiiij,^  el>e  eomes  under  a 
consideration  of  the  'future  of  the  mine.'  or  some  similar 
phrase.     .\s  much  of  this  should  1,,..  talmlated  as  po»ihIe. 

Ore  rallies. — Tlie  values  found  in  tlie  orehodies  from 
the  systeiuatic  sampling- of  the  mine  should  come  next,  in 
tallies,  with  such  comment  as  is  indispensahle  to  luciditv. 

'1  real  incut. — 'idle  liainlliufj;-  of  the  ore  from  the  time  it 
is  hrokin  in  the  nn'nc  'and  even  the  methoil  of  iireakin^f) 
until  the  finished  ])r(idttel  is  marketed  should  be  j^iven  in 
detail.  When  more  than  one  form  of  h.mdling  or  treat- 
ment is  jKiSsihle  the_\-  should  he  compared,  and  their  rela- 
tive etticiency,  cost.  savinj,\  etc.,  s;iven.  The  percentage 
saved,  .-md  the  losses  and  their  causes  in  the  various  steps 
of  the  jimcess,  should  he  given  in  full. 

Costs. — Costs  arc  divided  into  iiiiiiing,  metallurgical 
and  i^otcral.  Kach  should  he  given  in  detail,  with  analv- 
sis  of  all  eletiients  that  jiroduce  them,  under  divisions  of 
labor,  supplies,  etc.  With  costs,  ii  aurally  comes  a  consid- 
eration of  jiroceeds.  Metallurgical  processes,  with  their 
losses  and  proceeds,  are  set  down  in  one  column  and  the 
values  of  the  metals  treated,  wasted  and  saved  in  another. 
It  is  here  that  the  net  value  of  the  ore  comes  out.  This 
is  the  main  point  of  the  report,  and  appears  as  such  in  the 
initial  paragraph  giving  the  conclusions. 

Plant. — .\  docription  of  the  plant  and  other  surface 
improvements  comes  ne.xt.  with  such  alterations  and  addi- 
tions thereto  as  may  be  advised.  Questions  as  to  ade- 
ijuacy  of  plant  already  installed,  and  of  relation  of  plant 
to  output  and  ore  reserves,  are  here  discussed. 

ll'urking  Mctiiods. — An  outline  plan  of  opening  up  the 
Iirojierty  if  not  already  developed,  and  a  discussion  of 
working  methods  underground,  is  indispensable. 


XOTJiS  OX  MIX/-.   klJ'Oh'TS 


;{!»? 


.Issay  diiil  Saiiil'liin^. —  I'lic  lalilr  (if  a.ssa_\'  rt'sults  and 
the  calculations  of  a\  craves  slinuKl  he  rclci,'atc<l  to  an 
appendix  if  ihcrc  is  any  nunihcr  of  tlicni.  Mctliod  of 
sampling  should  he  clearly  set  forth  in  detail,  so  that  a 
iud.i,'nieiit  can  he  formed  of  the  thoi'ouLhness  of  the  work 
and  of  the  justness  of  the  conclusions  reached. 

Maps. — The  essential  maps  are  :  Surface  plan ;  the 
workin.i^s  in  i)lan  ;  a  vertical  lonL;itU(IinaI  -ection  of  the 
orehody.  To  these  may  he  added  a  key-map  of  the 
ref,non  where  the  |)roperty  is  situated,  a  geological  section 
of  till-  immediate  vicinity,  plans  of  levels  separately,  cross- 
sections  of  orebodics  at  typical  points,  plans  of  surface 
improvements,  plans  of  stopes  at  difTerent  stages,  details 
of  timbering,  etc.,  assay  plans,  and  an  almost  infinite 
variety  of  other  special  and  detailed  drawings. 

Misciilaiu-diis. — .Ml  tlie  collateral  information  useful 
in  connection  with  the  property  nut  strictly  belonging 
elsewhere  can  be  collected  here. 

.Ippciulix. — .After  the  bodv  of  the  report  all  additional 
data  should  be  placed,  as:  Detailed  lists  of  assavs  and 
calculations  of  average  vnhic.  tests  made  in  coimection 
with  treatment  investigations,  smelter  or  mill  returns  in 
detail,  lists  of  surface  improvements,  buildings,  etc.,  in- 
ventories of  machinery,  outfit,  supplies  and  the  like. 
Statements  and  matters  that  arc  purely  financial  should 
be  in  an  eiUirely  separate  document. 

Index. — .Any  report  of  more  than  four  pages  without 
an  index  or  table  of  contents  is  faultv  to  that  extent. 


MINE   REPORTS 

(Kilit..rij|,    JiMK     15,    ,.,,,5.; 

llic  'Xotcs  on   AliiK'  kri)..it.s;  uhich  ajipcarcd  in  uur 
last   issue,   may   auakeii   cxjirc^iMi,   ..f   divcr^i'  opini.ni.s. 
iMr.  Chester  I'.  Lee  has  many  >,u>i\,k  il.in^:;>  t,,  >;u  ;  mie 
of  these  we  venture  u>  emplub-,-e.     It  ,s  true  that  -'a  man 
ulio  is  IinneM  uii!  make  >talemcnt>  in  ;    i,,rm  that  eanimt 
be   mi>un<ler>tnn,I.-      The   .sp-nt   ..f   .e.enee   dues  demand 
strai-ht  thmkin-  an.!  the  direct  expression  of  ideas:  the 
apphcatinn  nf  >nence  in  iinnm-  asks  for  the  same  reeii- 
tude  of  nnnd.      i;.|uivocation,  amhij^niity  and   indireamn 
of  any  sort  in  a  mine  report  are  miscientilie  e\en   wiien 
nnintentiniial;    hut    when    deHherate!>    adn,,i,.d,    liiey    are 
uiipi-oiVs.sinnaL     We  have  no  patience  with  a  report'urit- 
ten   in   such   manner  that,   uhi>her   the   mnie   rither   does 
half    as    weU    ,  ,r   yields   twice    a.    nuich    a>    the    en.Ljiuecr 
vaj,niely  pre.hcts,  it  can  _\et  he  interpreted  as  a  vindication 
of  correct  jud-ment.     Sucli   unrk   is   mere   hocus-pocus, 
which  evaiis  respi  msilnlity  and  phiys  the  fool    with  the 
cliun  nr  cnipany  payin-  for  the  lep-rt:  it  i>  dishonest, 
in  that  it  is  a  failure  to  -deliver  the  .!;o'Hl>"-in  this  case, 
an  opmion  that  camiot  he  misunderstf-ul.     We  have  seen 
the  devel-.pment  of  this  tendency  :\mnv^  en-imers  m<:re 
careful  of  tlieir  reputation  than  of  their  dutv.     It  is  a  bad 
practice:  the  en.^ineer  who  receives  $5,(XK/i,.r  ins  exam- 
ination and  report  is  pai<l  ten  times  as  much  as  the  man 
vviiose  fee  is  $500.   fur  the  simple  reaso;.   that   he  has  a 
well-earned  reputation  which  he  puts  to  risk  every  time 
he   truthfully   expresses   Iiis   jud-ment   or   pives    Ids    ap- 
praisal of  a  mine.    The  physical  exerti,,n.  the  mental  exer- 
cise, the  time  consumed  are  nuich  the  same  in  both  cases; 
in  fact,  the  junior— or  the  man  with  the  lesser  rcput,.ti,,n 
—IS  apt  to  expend   more   muscle,   nerve  tisstie  and  time 
than  he  of  the  bi.t,^  fees;  the  valid  reason  for  paving  the 
one  ten  times  more  than  the  other  is  that  the  former  has 


.u/.\7-;  h'i:i'()h'TS 


399 


iilri'ady  won  a  rupntatidii  uliicli  In  imprrils  each  tiiiu-  liis 
ju(lj,niK'iit  is  put  tn  the  ti>t.  If  hr  pla\-  rMuml  the  snh- 
ject.  j^ivi'S  coiiohisioiis  in  niaj,Miil()(|iuiit  hut  ainl)it;u.nis 
phrases,  sliit'ts  his  respnnsihih'ty  to  suhnrdiuates.  nr  in  any 
way  refuses  to  fult'ill  his  Iiar-ain— the  opinion  wiiieli  faces 
the  facts  .and  aecipts  'lie  responsihiiitv  for  an  experi- 
enced judirnient — lie  is  (h'.-.honest.  'I'he  statement  (pioted 
from  Mr.  Ia'c  is  jirefaced  with  t!ie  clause  "a  man  who 
knows  his  hnsincss"  ;  and  this  [)roviso  (interpreted  in  a 
sense  Mr.  I.ee  does  not  inttnd)  anticipates  the  rei)lv  of 
those  who  adopt  the  methods  just  criticised:  they  will 
say  that  tliey  know  their  business  well  enonj,di  to  "<;et  out 
from  under"  when  any  rcsponsihilitv  oNcrhantjs  them; 
thev  deem  it  clever  to  i^et  larj^^^e  fees  for  tlu  siiniiLn-r,i  of 
opinions,  ami  they  consider  it  worKily-wise  to  "take  ci're 
of  their  reputations"  hy  avoidini,'  .-tateinents  for  which 
they  can  he  hroui^ht  to  hook.  lUit  such  conduct  is  f(,rei,t,Mi 
to  the  ri^ht  spirit  of  the  en^dnetTiuL;-  profession:  it  is  not 
even  sound  business ;  it  is  the  attitude  of  a  tricky  trades- 
man. 


THE   liMtKVAL   BETWEEN    LEVELS 

(Ediliiriai,  June  n,   iui>5  ) 

Tlic-  proper  (Ii.>t:uuT  lirtunii  k\il>  i>  a  iiraciual  p'niit 
that  is  (jfii'ii  prcMiititl  to  tlic  judj^iiU'iit  of  iiiiiu'  iiiaii;i.i;t.Tb. 
Those  who  avoid  tlic  fati{;iic  oi  tliiiikiti.L;.  plan  iluir  niaiii 
drills  icxj  It.  apart,  htcaiisc  a  .-i.ntiirv  is  a  mat  iminlur 
and  it  rcpn-.-ciit.s  an  interval  uliicli  is  iioiiorcd  by  ii>aj,'c, 
It  li\  iiotliin<,'  I'isr.  ll,>ufvcr,  thiTc  arc  others  who  are 
not  the  shivr-,  to  eiiipirii-i>in  ii|"  th:>  iiiiintelH-eiit  kind.  In 
South  Afriea,  it  lias  l.een  lound  that  eeoiioniy,  witlioiit 
loss  of  efticieiu-\,  i>  trained  Ia  inereasini;  the  di^taiiee 
l>et\\een  levels,  before  the  war.  150  ft.  was  the-  interval 
.Ljenerally  adopted;  sinee  tiien,  this  lias  heell  douMed  in 
certain  instances,  such  a.s  the  RoodejKiort  I'nited  mine, 
•nid  tin  re  is  now  talk  of  attainin-  a  ina\iniuin  of  (xx)  ft., 
ineasnred  on  the  dii)  of  the  lode.  .\  s.uin-  in  nuinn-  cost 
of  from  one  to  three  .didlm-s  per  ton  ,.  anticipated. 

1  he  di.stance  necessary  hetween  working;  l^.veis  dei)enils. 
in  the  first  instance,  upon  the  ch.iracter  of  a  lode.     (  )n  the 
Rand,  the  heds  of  'hanket'  are  fairly  res;ular  in  their  be- 
havior .-ind  in  their  i^dhl  content ;  therefore,  fre(|Uent  drifts 
are  not  needed  for  e.xploratory  puri)oses:  the  i^rnumd  be- 
tween any  two  levels,  that  are  300  ft.  apart,  can  be  as- 
sumed   to   ijossess    avera-e    characteristics    to    an    extent 
impossible  in  m<ist  of  the  variable  veins  which   represent 
the  ore   ileposits   of   other   regions.     Levels   ()0   ft.   apart 
are  common  in  mines  based  upon  thin  veins  of  rich  t^old- 
bcarin-  ipv-irt        nbject  to  eccentricity  of  dip  an.l  the'sud- 
den  clian^-es  due  to  short  ore-shix.ts.     The  rati.i.  between 
the  cost  of  drivin.c  a  drift  in  rich  ore  and  the  value  of  the 
output  to  be  obtained  In  inithe  slopes  overhead,  constitutes 
a  problem  ipiite  diii'erent  from  that  of  lar-e  levels  in  a  low- 
.Urade  mine.     .Mthou^di,  Ix-fore  the  eventual  exhaustion  of 
a  nunc,  it  may  be  necessary  to  drive  intermediate  drifts, 
it   is  obvions   that,    tor  exploratory   i)urposes    in  a   fairlv 


77//.    ISriilUWL  HLIlfl.l.X   I.IAII.S 


IIIL 


iiintdnn  ludo  "I  \><\\  ijradr,  it  i>  imi  iK(.-(,'^>,ir\  ;(.  make 
liii'sc  lcn)j;itii(liii:il  ^■l1t^  near  li.i^itlKT.  'I  ln'  iiiniu'V  Npeiit 
in  extciidiiif,'  siicli  levi  1^  u•Illaill^  unprodiuiivf  until  stoj)- 
m^;  lifjj;ins:  and,  in  l)ii,'  mines,  rn  H  iini\  i>  eapitai  thus  ex- 
jiendi'd  tni])riitital)l\ .  hut  ihc  maMitiiianee  of  dnli>  nm  in 
use  represents  a  ecnslanl  liiarqe  uiueii  it  i'.  advi>ahli.'  to 
avnid.  At  till-  Calmnet  iS;  lleela.  ItviN  wire  iilaenl  too 
ft.  apart,  a-.  lue.iMired  nn  the  dij)  ..f  the  IimK-.  nr  ahoiit  O5 
ft.  in  vertical  interval.  In  this  casf  the  drift  did  nnt  even 
fultll  an  i-xiiliir.-itdry  purpose.  luraiiNe  it  iiuhidid  i.iilv  a 
fraction  of  the  ;otal  width  of  on-  TIk-  Tamarack  hen- 
etited  h>  the  error  of  us  hi-  neiLjhhor.  and  the  levels  were 
run  cverv  1  So  ft..  mea>iired  vertically,  .t^iviiij,'  300  ft. 
alonj;  the  lode,  .\fter\vard.  suhdeveLs  were  e.Ktended  at 
intervals  cif  uxj  ft.  .\t  the  Hurra  Hurra  mine,  of  the 
Tennessee  Copper  t  ompans .  the  main  levels  are  300  ft. 
apart,  hut  the  lode  i>  crosscut  at  each  100  ft.  of  sinkinj^; 
and,  when  actual  e.xtniction  he;.;ins,  ,^ulJdeveIs  are  ex- 
»  tended  from  the  crosscuts.  '1  he.se  initi.al  crosscuts  and 
the  le.ss  frequent  main  levels  are  adecpiate  for  exploratory 
purposes;  for  stopin,t,^  the  >uh-levels  are  nee<led  in  order 
to  afford  points  of  attack  and  to  facilitate  transjjort.  In  a 
mine  the  out|)Ut  of  which  fjoes  to  a  smelter,  it  is  unflc- 
sirahle  to  dro])  the  ore  down  chutes  of  excessive  hei,Lrht, 
because  a  [lowdery  product  hinders  the  workin.rr  of  the 
furnace.  \\  hen  the  ore  is  destined  for  a  stamp-mill,  the 
<lisintet;rati(jn  is  not  injurious;  on  the  contr.ir\,  it  [)er- 
forms  part  of  the  work  of  the  crushiuL::  machinery. 

i^rainap;c  is  another  factor.  In  wet  .ground,  it  is  ex- 
pedient to  run  the  new  level  at  such  an  interval  below 
the  workint;  drift  that  the  block  last  opened  up  will  be- 
come drained  while  the  upper  one  is  Ijein^,"-  stoped.  Ex- 
cessive water  binders  miiiiiiL,^  and  adds  to  all  the  costs  of 
operation  ;  by  adiustint,^  the  lifts  between  levels,  the  p.uinp- 
int::  ran  I'e  limited  and  the  draiiia|L,'e  of  the  lode  r.ui  be 
rcETulated.      In   mines   where  the   looap   irrnutnl   <-,f   n    fni>1i 


Uti 


I  III:   liCONOMfCS  ()!■   MIMM; 


nllKT  iMiiu-idis  uith,  IT  iT..-~i's,  tile  lf„lc,  It  uill  lie  imiiid 
that  till-  i\,it«  r  U'\il  I'olIiiU^  tile  iii.iiii  >llalt  a--  -iiikiii},' 
l)rnj;rc.ssis,  |''anlt>  alsu  at'1'iM.t  tlu-  proMrm  iii  liaiid  1k- 
caiisf.  uluii  a  hn\v  \>  siilijtrt  tn  mhI:  <1i^1(  natii  his,  it 
mcMiius  lll^■^^>a|•\  ["  ilnl't  al  sliurt  vi-rlKa!  iiitrrvaN  m 
(iriltT  til  ikti-riniiK-  ilic  pii>itiiiii  nf  the  \ciii  nr  (>t  i\\v  on- 
!^li""'-  A  lilt  iif  M'viTal  luttnlrcd  i'<  rt  is  iiiii)rai'tii.-aiilc 
uiidiT  sttcli  I'dtiditidiis.  iKcaiisc  a  i!is])laci.-tiniit  c.f  ilic  IikIc 
iiiiudit  iliaiim'  i'h-  \\\v>\v  plan  nf  devclnpnicnt  and  rtiidi  r 
Slid)  a  Irvil  it""(rntivi\  In  mims  nf  tin's  kind  Cand  niii-i 
metal  Indts  a.  lalilc  to  siu'h  ecc-cntrii-ili(s  of  licliavinr  ) 
the  fiini-tinn  of  a  drift  is  i-xpl.  irat- tv  first,  and  npcrativc- 
affrrward  ;  it  serves  tlu  pnrp.isi-  ,,f  tisfini;  the  vein  and  cf 
fnidiiiLT  the  ore-shr.df  lufure  it  is  turned  into  an  tnider- 
Krniind  artery  fi.r  the  transport  ..f  material  to  the  shaft. 


tf;e  cost  of  mining-ii. 

CV    W.    R.    I.NCMLx 

(Ji^iy  '5.  Kjo;  J 

In  my  first  paper  on  tliis  siil)j.ot,  wliicli  lias  iKtti  cnm- 
nuiUcd  upon  by  Messrs.  I'inlay,  .\rj,'all,  Tavsainl  lirowii, 
I  (lid  not  look  forward  to  a  disjiissioii  of  the  advisability 
of  keepinj;-  account;,  uiiicli  ui.iild  >li<i\\  'In  i-us'  of  niiu- 
ing,  nor  did  1  conleiiipiate  a  cjiscussion  of  the  ..einizatioii 
of  niiuiufi^  eosts,  exce])t  inci(kiitall\ .  .Mv  piirjuisc  was 
rather  to  draw  out  tiir  ex[)irirnce.  reduced  to  dollars  and 
cents,  in  miuiiii,'  under  various  conditions,  and  by  itemiza- 
tion and  classification  of  costs  to  analyze  the  difTerences  in 
conditions.  .Mr.  I'inlay  appreciated  this  intention,  and  re- 
marked that,  even  in  ca.ses  of  wide  difference  of  condi- 
tions, there  would  still  be  found  operations  in  which  the 
conditions  were  more  or  less  parallel.  It  w.is  f.ir  from  my 
l)urpose  to  uphold  the  desirability  c'f  att-ntiiii|^r  ^  ],,w  cost 
of  mininf^  i)er  ton,  at  expense  of  the  maximum  profit;  in- 
deid,  such  argument  as  I  presented  on  that  topic  was 
(juite  the  reverse;  but  I  aimed  to  draw  out  the  reasons 
why  mining  costs  should  vary  so  much,  not  only  under 
obviously  dissimilar  conditions,  but  also  under  conditions 
that  appear  approximately  analogous,  or  at  least  that  may 
so  appear  to  those  who  have  not  minutely  studied  them. 

In  considering  the  cost  of  mining  from  this  viewpoint,  I 
have  taken  the  trouble  to  compile  the  following  data, 
which  are  mostly  from  official  rejiorts,  cither  the  originals 
or  the  ab-stracts  published  in  Thk  Exoi.nei-ring  and 
.Mining  Journai,.  They  refer  only  to  gold,  silver,  cop- 
per, lead  and  zinc  mines ;  coal  and  iron  mines  are  excluded 
from  the  scope  of  this  inquiry ;  and  the  case  of  the  Lake 
Superior  copj)er  mines  is  reserved  for  a  separate  article. 
Few.  if  any.  enr  ts  being  familiar  with  the  funda- 
mental conditions  \^  iHcll  'determine  tlie  co-;*  r^.f  ;-!--r-.-T-!rr  ^rt 


4<»4 


77//;"  fiCOMKMICS  or  MIX  ISC, 


all  of  the  districts  nu'iitioned,  explanations  from  those  who 
are  acquainted  with  them  will  surely  he  welcomed,  as  will 
be  also  such  furth.er  data  as  will  throw  more  li.ijht  on  the 
subject. 

Crass  WiUcx.  California. — .Xorth  Star  .Mines  Company 
in  i()02  minrd  17.3M')  tons  of  ore,  M  cost  of  $15. (/1  per 
ton,  divided  as  follows:  (  •peratint,''  t'X])enses.  $7.7f> ;  ^'en- 
eral  expense,  $1.11  :  extraor<linary  ex])e;;se.  $0.57;  devel- 
opment, $5.04;  improvemiiits.  Si. 42. 

Calaveras  County,  California. — I'tica  Mine.  Larye  veni 
on  Mother  Lode.  In  produeinij  about  ,V»  tons  of  ore  per 
da_\'  there  are  rei|uired  two  lodiour  shifts,  each  consi.stint:; 
of  12  miners,  u  helpers,  iC)  shovelers  and  (>  trammers; 
total,  45;  in  addition  to  which  a  crew  of  10  timbermen  is 
employed.  Miners  are  paid  $,^ ;  timbermen.  $3;  'Ipers, 
shovelers  and  carmen,  $2.30  per  day.' 

Sutter  Cri\'k.  Ca!if<u-nia. — Central  F.ureka  Mininsr 
Company,  in  ii)(j2,  produced  43.545  to. is  of  ore.  at  cost  of 
$1,71)5  f'""  uiinint;,  and  $0,511;  for  (levelo])i!i<j.' 

Raiul.shiir^.  Calif or)iia. — \'ellow  Aster  .Mining  &  Mill- 
ing Company.  Eupene  11.  I'.arton  '  reported  the  cost  of 
mining  i4,<>oi  tons  of  ore  as  follows: 

MiljiilR.  Cost.  T^er    Tnn. 

Labor    $io,(i</i.fK)  $0.7.^(10 

'I'linhcring    ^^o.^.s.s  o.o.sscxj 

TimlH-r    J.frf)!    47  ;«2j8 

Powder   580. (>H  o.CMy77 

Fuse   9.V90  oocxm,? 

Caps   44  97  o  oo.^oS 

Lights    ■  ^ofi.dj  o  (uioo 

Biackstnilhing   4')^  ,1-  00,^414 

Hfvclnpnicnt   62872  004,^06 

Hanl.iyi'    64.V90  c. 04410 

lliii-^tmg   (*)7  ')i  0.04780 

Tdtai    $17,656.40        $1  .  10<)20 

'J.    F.    Collier.    Jr  ,    Tiinisarli  ni.i    .\iiiencaii    Institute    Mining 
Engineers.  iSfX). 
'Idem,  June  6,  ujo.l.  p   8<h) 
'The  Fncineeking  a.nu  .Mi.m.ng  Jock.v.m..  Jannary  28,   11)04 


77//:  COST  Ol-  MIXIXC  405 

Ccmral    F.xi.ciscs.  ('""■  Ter    Ton, 

Mi^colla.icoiis    $i,4('0.;o  $0.10000 

Assaying  "«•<"  o.oiioo 

Salaries   ^50. 87  o.o<,507 

Tailing    3l.^33  002140 

Incidentals    440.9-'  o  O-'O^o 

Total    $3.3^5-83        ?o.J-773 

The  fjcneral  c\]Knsc  is  to  some  extent  chargeable  to  the 
niillinS.^.  Water  is  obtained  trotn  wells  ().5  tiiiles  frotii  the 
mine,  ubeiier  it  is  putnped  at  a  cost  of  kjc.  per  1  ,a>)  'J^'dl.. 
wliicb  comes  tu  -'J.03C.  per  ion  of  ore,  no  part  of  this  l)e- 
infx  nicluded  in  the  cost  of  mininjj.  The  mttie  is  etiuipped 
to  ])ro(ince  ^tx)  tons  of  ore  ])er  day.  l~nel-oil  costs  4,5c. 
per  <;al.  ;  himber,  $32.50  per  .M.  The  rate  of  wattes  is  as 
follows;  .Miners,  9  honrs,  $3;  muckers,  <)  hours,  $2.50; 
carmen,  i)  liours,  $3;  tinibermen.  ()  hours,  $3.50:  amal- 
gamators, 12  hours.  $4:  stationary  eni;iiieers.  12  b.ours. 
$4:  bois'mg  engineers,  8  hours,  $3.30;  i)ump-ineti.  12 
horns,  $3.50, 

Black  Hills.  South  DiK-k/u.  — 1  loinestake  mines.  \ein 
of  mineralized  schist,  300  to  500  ft.  wide.  Worked  pa.-- 
tially  open-cast,  partially  undergrouml.  In  iStjH  mining 
cost,  $2.17;  general  expense,  $0.14.  In  the  vear  ended 
June  I,  i()<.)3,  the  cost  of  mining  :,27i).o75  tons  of  ore  was 
§2.04,  not  inchiditig  general  expense;  total  cost,  exclusive 
of  milling,  was  $2.^\-.  .Mine  ojiened  to  depth  of  1,100  ft, 
Biitghani.  L'/ii/i.— Massive  deposits  of  pyrite  (gobl,  sil- 
ver and  copper-bearing)  in  limestone,  dip])iiig  moderati'- 
Iv.  (.)[)erated  ciiietiy  through  adils.  Timbering  with 
S(|u;ire  sets. 

L'tah  Consolidated  Mi  ling  Company;  Highland  Boy 
tiiine,  operated  through  si..  ...lits  to  700-ft,  level,  and  bv 
.sliaft  to  8cK)  ft,  ( )re  transported  by  aerial  tramw;iy  12,700 
ft.  to  liingham  station,  thence  by  rail  to  smelter  at  Mur- 
rav.  in  \i)02  produced  K^J.Ji^  tons  of  ore  at  a  cost  of 
$1.45  for  mining  and  tramway,  $0.25  for  exploration  and 
development  ;  in  11*03.  produced  11)0.250  tons,  at  a  cost  of 


4(lti 


/•///:  liCOXOMICS  Ol-   MfX/XG 


$!.;«  for  mining  and  tramway,  $0,033  f'^r  exploration  and 
devtlopmcnt ;  gcnural  expenses  not  inc.'iuled. 

Mercur,  67a/!.- Deposits  of  gold  ore  in  limestone,  lying 
ap.  roximately  flat.  Alercur  Mining  &  Milling  Company, 
in  the  year  ending  June  30,  1902,  extracted  ore  at  cost 
of  $1.41  per  ton,  including  general  expense;  in  year  end- 
ing June  30,  1903,  extracted  34*^,359  tons,  at  cost  of  $1.30 
per  ton.  Mining  done  by  caving  system.  Mine  operated 
through  adit,  with  electric  haulage,  two  locomotives,  10- 
h.p.  each,  capable  of  hauling  20  tons  at  six  miles  per  hour. 

Frisco,  Utali.—Horn  Silver  Mining  Conipanv  in  1900 
produced  27,411  tons  of  ore,  at  cc>t  of  $4.88  per  ton,  of 
which  labor  on  ore  was  $2.087 :  on  dead  work,  $0,703  ;'  on 
surface,  $0.85'^;  supplies,  timber,  fuel,  etc.,  $1.24. 

Cripple  Creek,  ColoraJo.~Go\d  mmiug  in  veins  in  igne- 
ous rocks  (chiefly  andesite).  Mines  operated  through 
shafts;  depths  moderate;  water  variable.  Miners  receive 
$3.40  per  day  of  eight  hours  (42.5c.  per  hour).  Coal  costs 
about  $4.60  per  ton.  Considerable  timbering  required. 
Alining  costs  generally  from  $2.50  to  $3.50  per  ton  of  ore 
liuisted,  including  taxes,  insurance  and  general  expense. 
Sorting  of  the  ore  on  the  surface  materially  increases  the 
cost  per  ton  of  ore  shipped.* 

Siratton's  Independence,  Ltd.,  in  year  ending  June  30, 
1902,  mined  230,099  tons  of  ore,  at  cost  of  $4.18  per  ton. 
of  which  $1.27  per  ton  was  on  account  of  development 
work.  The  latter  comprised  264  ft.  of  shaft.  1,521  ft.  of 
raises,  160  ft.  of  winzes,  and  11,738  ft.  of  drifts  and  cross- 
cuts. Total  depth  of  main  shaft.  1,430  ft.  In  year  ending 
June  30,  1903,  229,797  tons  were  hoisted,  at  total  expense 
of  $3.70  per  ton,  of  which  $0.87  was  for  development, 
which  comprised  1,716  ft.  of  raises  and  8,387  ft.  of  drifts 
and  cross-cuts. 


'J.  R.  Finlay,  Tin:  E.\gi.\eeking  a.\d  .Mini.vg  Journal   Novc 
Ler  ..'I,  190J. 


THE  COST  or  MIMXC 


407 


I 


Lcadrille,  Colorado. — Blanket  vein,  containing  massive 
shoots  of  argentiferous  galena,  blende  and  pyrites.  Oper- 
ated through  shafts;  de|ths  moderate.  Rather  larger 
quantity  of  water  to  pump.  Timbering  with  square  sets. 
Miners  receive  $3  per  day.  Mining  costs  large  producers 
about  $2  per  ton,  including  general  expense. 

Ouray,  Colorado.— C^imp  Bird  vein,  a  fissure  dipping 
about  70' ;  average  width,  6  to  7  ft.  Vein  material,  quartz, 
impregnated  with  gold,  galena,  pyrite  and  ohalcopyrite. 
Ore  occurs  in  shoots,  wherein  the  grade  is  subject  to  con- 
siderable variation.  Mine  opened  by  adit  2,200  ft.  long. 
Timbering  is  required  only  in  the  raises,  winzes,  chutes 
and  tloors  of  stopes.  About  40%  of  the  ore  broken  in 
sloping  is  taken  out,  the  remainder  is  left  in  the  stopes ; 
the  percentage  of  waste  trammed  out  is  small.  Mine 
worked  by  two  8-hour  shifts  ;  3.25-in.  machine  drills  most- 
ly in  favor  ;  4u','o  d,\  namite  ;  compressors  driven  by  electric 
power,  l.arge-machine  men  receive  $4.50  per  shift;  help- 
ers, $4 ;  small-machine  men,  $4  ;  smi'hs.  $4  :  helpers,  $3.25  ; 
timber-men,  $4  to  $4.50 ;  helpers,  ^„  ,  shovelers,  $3  ;  tram- 
mers, $3 ;  enginemen,  $45o' 

During  the  year  ending  April  30,  1903,  there  were 
broken  111,245  tons  of  ore,  wet  weight,  of  which  71.793 
tons  were  delivered  to  the  mill  and  39,452  tons  were  left 
in  the  stopes.  The  ore  milled,  less  moisture,  amounted  to 
66,825  tons.  The  cost  of  mining,  not  including  general 
expense,  was  $367,838,  or  $5.50  per  ton  on  the  ore  deliv- 
ered to  the  mill  (dry  weight),  or  $3.50  per  ton  on  the  ore 
broken  (wet  weight). 

Tclluride,  Co/orat/o.— Liberty  Bell  mine,  ig02,  pro- 
duced about  7.500  tons  of  ore  per  month,  at  cost  of  $2  to 
$2.30,  not  including  general  expense. 

Butte,  Montana. — Immense  veins,  dipping  steeply,  in 
granite.      Ore,    chalcocite,    boniite    and    enargite,    with 

»  Q  \V  Pnrington,  Transactions  American  Institute  Mining  En- 
gineers, 1902. 


408  THE  ECOXOM/CS  OF  MfXfXG 

pyrito.  in  a  (jiiartzosc  and  granitic  panijiu-.     Wins  attain 
a  width  of  too  ft.  and  more,  lo  t<i  20  ft.  stnpts  being  com 
mon.     The  cost  of  ir-  ling  at  i'.iiiir  langis  from  $3  to  $4 

]HT    Illtl. 

The  foilouing  retnrns  were  made  h\  the  I'.utte  coi)per 
companies  to  the  assessors  of  Silver  l!ow  counts,  .\h)n- 
tana:"  C'olusa  Parrot.  J(>^.\i^  ion>.  mining  eo^i.  S^.jn 
per  ton:  Mntte  &  Moston.  -M.v.^.ii  tor.s,  $^.2/ ;  Parrot. 
•253>-''^4  tons,  Sj.8i  ;  I'.oston  and  .Montana.  907,227  tons. 
$2.61  ;  Anaconda,  i  .,^92.835  tons.  $3.49:  Washoe,  106.58S 
tons,  $:i~'):  Montana  Ore  Purchasing  Company,  293.'^  ^J 
tons.  $3.54.  'i'hese  figures.  Mil)mitte(l  for  taxation  i)ur- 
pose,-,  are  of  little  tecimical  value. 

Aiiaconda  Copper  Mining  Company;  The  production 
in  18(^7-1898  was  f)28,05i  tons  of  ore  from  the  Anaconda 
mine,  and  813,487  from  the  Syndicate  mine.  The  cost  per 
ton  was  as  follows  : 

''^'"'-  Anacon.la.         Sviuluntc 

':-''P'"^'^-^-^  o.  :o5  o  M3 

Supplies    „   ,10  ^,  ,08 

^f-^^ym   ■: o.noj  o.oo(. 

A>lniinistration    .itid    nciier.il    expenses o   177  o  1^8 

I Vrsoiial   iiij urio    ,-, . o.>8  o  oIm 

,V.'"''^"''   o,_-„o  o:?05 

"•"'■''    ■■■•, ,- n  "iS  0.014 

KLjiairs  .and  renewals    0(7  o    'K) 

.\\w   eonMruc■|l,,^^    ^^  j'ly  o^uo 

■^'^''''    ?J.9l3  ?.i^444 

Caiir  d  Alciic.  /</,//;, 1, —Steeply  dipping  fissure  veins 
and  .shear  zoms.  containing  large  an<l  uide  bodies  of  .sil- 
verdead  ore.  .Mostly  o|)ened  by  adits  ;  water  power  avail- 
able and  generally  used  :  timber  abundant  and  cheap. 
-Miners  receive  $3.50  per  dav.  Three  methods  of  mining 
employed:    (1  )  timbering  (  M|uare  sets)  :  (2)  filling;   ,  7,) 


"lllK    EiVt,l.\EKHlN(,    .^^■l)    .Ml.Nl.NC    JoLKNAL,    Jul}'    Jj.    I904. 


Tim  COST  OP  MIX  IXC, 


409 


tiiiilxriiis  and  rilliii.s,^     Co^t  of  niiiiiii!;'  ami  milliner.  $-'■5'^ 
111  $,^.50  per  ton  (  l-"iiila\  ). 

'\'\k-  HunkiT  Hill  &  Sullivan  Minini;  ('onipanx  in  npJ 
rxtractcil  jUj.sch)  ton>  of  orv,  at  co.st  of  i^J.oc)  \wr  ton. 
Miners  receive  S,^5o;  muckers,  S.^ :  timbernien,  $4.  In 
n;<),^  the  cost  of  minini,'-  ->S<^.713  tons  of  ore  was  $i.()33 
per  ton,  not  incluiliiiLr  L;i.neial  e.\|iense.  wliich  canio  to 
11.5c.  per  ton.  .\11  the  ore  was  trammed  from  the  mine 
liv  electric  lianla^^'  tliroui,di  the  Kellofjtj  tunnel  i  iJ.fXJoft. 
lon^),  .it  a  cij-t  of  7c.  |)er  ton.  In  addition  to  the  ore, 
47,000  tons  of  waste  was  trammed.  Drifts,  cross-cuts, 
raises  and  winzes  cost  an  averatje  ^<\  $7.31  pcr  loot.  4,043 
ft.  hein<^  driven. 

Doui;Ias  L^iciitd.  .  llashn. —AurUL-nms  dike  of  syenite  in 
carhonaceons  slate.  Dike  stands  at  steep  angle  and  attains 
width  of  4_'o  ft.  Situated  close  to  the  sea,  with  respect  to 
which  the  position  of  the  orebodies  has  i^re;it  influence  or. 
ihe  methods  and  costs  of  niiiiiiif;.  Mines  formerlv  worked 
cliietlv  open-cast  ;  henceforth  the  underground  mining  will 
he  tlie  more  important.  Miners  receive  $^.50  ])er  day, 
with  board  and  lodging. 

Alaska-Treadwell,  opened  by  shafts  to  c^co  ft.  below 
sea-level.  Water  less  than  50  gal.  per  nun. ;  levels  opened 
1  10  ft.  and  150  ft.  apart :  no  timbering  required  :  hoisting 
by  skips  frinu  stor.age  bins.  \  ertical  pillars  left  to  support 
walls,  2o')'c  loss  of  ore  estimated.  in  sto})ing,  one  drill 
breaks  34.(jf>  tons  of  <  ri\  with  consumption  of  12.53  lb. 
of  Xo.  2  dynamite,  in  10  hours,  in  addition  to  which  0.85 
lb.  of  powder  per  ton  of  ore  is  consumed  in  bulldozing. 

In  the  year  ending  .M.iy  30.  iip3.  the  Ala.ska-Tieadwell 
mined  7S^).(>2^  tons  at  cost  of  o.(>022,  not  including  gen- 
eral expense.  Development  work  amounted  to  '),I45  't- 
An  average  of  ^^}i  machine  drills  was  em[)loyed  in  the 
mine  (7  on  developiiK-nt,  4  on  cuttiiiL';  out.  7.5  in  pits,  and 
14.5  in  underground  sloping  I.  The  t(Jtal  of  holes  drilled 
was  783,300  ft.,  and  of  ore  broken  906,625  tons,  making 


4U) 


I  111:   l:CO.\(>MICS  ()/■■  MfXIXG 


an  averatro  of  1.14  tons  per  foot  of  hole  drilKd.  T\h-  awr- 
atjc  work  per  niacliiiK-  per  \n  hours  was  ,^4.4  it.  of  hole 
''rilled.  .Machine  drillers  111  the  open  pit  were  paid  $3.30 
IHT  day,  with  hoard  and  lodn;-ini,r:  iinder<,'round.  Sj.30, 
with  hoard  and  lod-m^r;  the  difference  hein.i:  'liK'  I"  the 
f.\tra-dani;er  in  the  open-cnts. 

Alaska-Mexican,  kjckk  .Mined  i*i'i.44()  tons,  at  cost  of 
J<i.o8u  per  ton.  not  including,'  ^^eneral  exi)ense.  Develop- 
ment work,  7,.o<,4  II,  I„  M/Ji.  mined  ijH,<,(m  Kjhs,  at  cost 
of$i.l(^j,?.  Development  work,  5.441  ft.  In  iijoj,  mined 
207,455  '""•-•  ;'t  t^'ost  of  .i=i.05(;.  DeveloiJincnt  work.  5,28') 
ft.  Scale  of  wa.ires:  .Machine  drillers.  $2.50;  heli)ers. 
!$2.2~,  ;  common  lahor  (  white),  $2;  .smiths.  .S4  ;  pht.s  hoar.l 
and  lodi^rm-  i„  ^.^,-1,  ^..,^^.  i„,]j.,,|  i.,!,,,^^  <;_,^  without  hoard 
or  lodjrint^r 

.\laska  I'liited,  1901  :  Ready  Ihillion  iiiine— 171 ,04.' 
tons  rais-d,  chiefly  from  450  to  6(50-ft.  levels.  Co.st  per 
ton,  M.I 788,  not  including  general  expense.  Develop- 
iiieiil  work,  2.-,^^-^  ft.  -^oo-ft."  mine— 89.S40  tons  raised, 
chielly  from  400ft.  level.  Cost.  §1.2281  jier  ton.  Devel- 
opment work.  1.708  feet. 

l\ossliiii(l.  lintisli  r<)/i(»(/)UJ.— Zones  of  sheared  rock, 
niinerahzed  with  .uiriferous  pxrrhotite  and  chalcopyrite 
U])  to  width  of  100  ft.  or  more,  dipping  at  ahoiit  70'. 
\  ein-filling  very  hard  :  stopes  timhered  with  .scpiare  sets  ; 
ore  stands  10  cu.  ft.  to  the  ton.  Aixiut  20';  is  .sorted  out 
as  low-grade  (to  second-class  dumpi.  Timhering  costs 
ahout  21c.  per  ton  of  ore  raised.  27c.  per  ton  of  ore 
shii)[)ed.' 

Center  Star  Mining  Company,  operating  on  large  vein 
01  ain-iferons  copper  ore.  The  costs  per  foot  of  develop- 
ment work  and  per  ton  of  ore  mined  during  the  year  end- 
1  Septemher  30,  1903.  were  as  indicated  in  the  following 


tahle 


11.    -McDonald.   Journal   Can'-di.in    M 


nunc;    Institute.    Vol.    VI. 


THE  COST  ()!■   MIXIXG 


411 


Drill 


1HK 


per  ft. 


-IVx.'l, 


l-nR-m. 


ft. 


f7  31 


Di-iflint!. 
per  ft 

$4  5.? 


Mil 


$0,405 


1  liii^tiiiK.  uiulfrg'tul.  .  .  4.71)  ....  ....  

1  liii^tiiifr.  main  sliaft..  1.48  o.Hi)  o  in  n.iqo 

C'niiiprcssed    air 1.74  2  oS  t.O/  0.120 

.Mi..e   vi-iitilatiiMi o._'.?  0.17  0,13  0.015 

riniipiiiK    0.71  i.o<)  o..^4  0.0.^5 

.\s-ayiiij;    0.55  0.47  014  o  o,?o 

."^urMyuig    0.20  0.17  o   II  0010 

(k'lH-ral   expense 3.57  2.71  1.51  0.185 

Total.s    $i>i-77  $29.97  $17. o<;  $2,065 

The  (lcvcI()])iiK'in  work  dotU',  aiul  the  cost,  and  tlie  aver- 
age.>  per  fool,  are  shown  in  the  tahle  below  : 

l-\.L-l.  .\ituuiilt.  IVr  ft. 

General    work    $.?-058         

Raises    ifiS.o  5.577  $^'I07 

Winzes    79.0  .3.0C2  38,77 

Driiu-.)^    2.903.5  49.(122  17.09 

Totals    3.1(58.5        $()1.3I9        $i'.>-35 

Under  p^eneral  work  are  incliKk^d  stations,  re-timber- 
ing, macliinery  and  etiiiipnient,  repairs  and  maintenance. 

Tlie  total  ([uantit)'  of  ore  mined  and  sold  was  88.387 
tons,  of  wliich  3.934  tons  came  from  development  work. 
The  average  cost  of  mining,  viz.,  $2,065,  '^  computed  oii 
the  84,453  t^'^"^  of  ore  sloped.  The  development  work, 
costing  $6i.3i(),  amounted  to  about  $0,725  per  ton  on  the 
ore  .sto])e(i. 

Ymir  ( iold  Mines,  Ltd.,  in  1901.  minetl  7o,()40  tons  of 
ore,  at  average  cost  per  ton  of  $1,814  for  mining,  $0,150 


4i; 


Till-   liCOXOMICS  OF  MIMXG 


iir  adnimistf.-iiiMii  ,in,i  c,,  j-,j  f  .^ 


.i^Tiii  ral  :in.l  rMntiii-riil 


t\\ 


^pcii.sc:  tlu'   laM    luM  luiiis   sliniiM  1,0  i)rn|M.rti.„u  ,1   Ik- 


>iii  iiiiiiiiii. 


ami  luilliiii. 


IhicktuiKit.     7 
cti|)rifcr(Pii,s  ]i\  nit 


CllllCSSCi 


-\\u 
,-lii.-t.      I 


t( 


iqo     It. 


uilh 


Lje    li  iiticiilar    (li  pi  ivit>    r  ,f 
tiiM's  var\   frciiii  a  few  feet 


;rral     Uiunli, 


illlipui;. 


>tl  CMllv 


'  ii>i  ikm  a>  \it  1..  niil\   ii),„kralf  (l(.'i)tli.     (  )n-  st. 
cliamliiTs  :  iio  liiiilnTiiii:. 


'1H(1  (Hit  in 


flllK-SMC  CnppiT  (■(Ull] 


It  .S().S4i  i,  n<.t  inc-hidin: 


/■/(;/    Kit 


cr. 


M 


j:iiK'ral  expense. 


ore 


K'ili.'ia  (lisseiimiate 
JirMximately   tlat 
imci)iiini(iti.       Mill 


issoiin. — Immense    shouts   of    lead 
d  in  mai^nesian  liiiiestdiie:  jxisitinn  ap 


-topes  .So   ft.   liii;l,   and   (K)   ft.    ui.K.   „i 


es  operated  throntjli  sliaft 


ft.  deep,  with  efitkient  efinipnient.     .\n  timl 
water,  joo  to  j,o( 
-shoveltTs,  '$i.yz, 


XJ    1,^1 1.    ] 


)er  111111. 


.\i 


s,  300  to  ^(x> 


HTiiit,^  re(|nired 
iiiers  receive  Sl.S^ 


nine   liou 


III 


o.il 


inois 


costs  .S-'.j(-  per  ton.      M 


(fr 


otn  .south'-  n 


min^r  cost,  about  $1   ])er 


ton,  inehi.hii-  -eiKtal  expense  aiul  dehverv  to  null,  on 
basis  of  ah.nit  i.o<.)  tons  per  dav,  hut  nut  inchuhn-  devel- 
opment work,  construction  or  amortization  of  plant.  These 
.statements  refer  to  the  conditi.Mis  hef(,retlie  recent  strikes, 
a.  result  of  which  wa-es  have  heen  incrcase.l,  time  re- 
duced to  ei^dit  hours,  and  efticiencv  of  labor  decrca.sed 
.somewhat  increasin.y:  the  cost  of  minin.,r.  I'mspectinp  in 
tins  district,  both  from  surface  and  under-round,  is  done 
ciiietly  by  diamond  drilliiii,'-. 

Jvtii",  .l/;.v,sv((r;.  — IX posits  of  zinc-blende  and  galena 
>n  lenses  of  chert  in  limc-tone  :  also  sheet  deposits  of  .sim- 
ilar ore.  Considerable  variati..r.  in  character  ,,f  ore  as  to 
hardness,  and  as  to  r.u,f,  |,„t  ,i„  ^u,.,.^  ,i,,p„siis  are  gener- 
ally very  hard.  The  ,leposits  lie  appro.ximatelv  Hat  and  at 
moderate  depth,  .s.v  150  to  J50  ft.  Life  of  the  mines  is 
.short  and  conditions  decree  cheapness  of  plant  ratiur  than 
(iurai)ihtv.  (innind  is  not  developed  ahea.l.  except  bv 
churn-.lrill.ng   from   surface.       Cost  of  opeiiin-   mi.;,,   u^ 


THE  COST  Ol-  MIMXC 


iV.\ 


j)ro(luoc  75  to  io(3  tons  of  ore  in  lo  liours,  inoludinp  con- 
centrating,' mill,  is  about  $i5,fX)0.  Miners  are  paid  $^.^5 
and  slitivelcr-  S^J  per  day.  Ahniit  J5  to  ,^7.5  tons  of  ore  is 
stMped  per  drill  per  day.  Tlie  cost  of  nuninj^  in  f^round 
tliat  re(|nires  no  tiniherint;  is  appro.ximately  as  follows; 
.Miners  and  lieli)er-.,  17c,,  trannner^  and  shovelers.  He.; 
drill  sliarpeninj,',  ilc.  5c.;  expk)sives,  loc. ;  hoisting'  ( bi- 
l)(ir),  (>c.  ;  su])i)lies,  4c.;  fr.el.  (>c. :  supervision,  vc.  ;  total, 
<)8c.  ;  not  inciudiuf^  aiiy  punipini:  or  general  expense.  The 
actual  costs  in  six  different  ninies  operated  durins;  the 
same  year  were  as  follows: 

Siirf,icf    pl.iiit $0  noo  $0  (KX1  $n  004  $0  010  $0  017  $0,006 

Rep.   surface   plant 0.007  0.005  O.OOJ  0.011  0017  o  (KjS 

I'lulcr^rmnul    plant ...  0.000  0,000  o.oo-'  ooKi  0.033  o.oio 

Kep.  niiirK'n>niul  plant.  o.O(X)  0.005  0.001  o  ojl  0.040  0.014 

lIoistiiiK    o.oj,?  0.03J  o.oj.^  0035  o  04-'  o.o.u 

].-,.(.!    o.o-'S  o.o.y  0.03*)  0040  o.o<)7  0040 

Mining   o  J48  0.258  o.-'4i  o  J31  0.JK2  o  j5j 

i)>velc)pnK'nt    o.two  0.041  o'.ojj  0.011  o.o-m  o.oig 

HIackMiiithinK    o  oji;  0.033  0,041  0,034  0,035  0.034 

Shoveling  .and  trani'L,'.   o.i-M  0.174  0.IJ3  0,148  0.161  0.143 

iv^cplosivis     0085  0.073  o.oty>  0.110  0.125  0.098 

'IdiiK    0.003  0.003  0.004  o  ojo  0015  o.oog 

TinilKT   aiul    track..,.   0,005  0.003  0.004  o.nii  o.njS  0,010 

Lighting   0,004  0.007  D.oo<)  0,(X)8  0,010  0.007 

I.nliriciting    o.cxx)  0.000  o.(XX)  oooo  0.001  0.000 

Pniiiping    0.000  0.000  0.000  0.000  0.020  0.0O4 

.Xcciilcnts     0.002  0.000  0.002  0.000  0.000  0.003 

Totals    $0.56    $o.U()    $0.60    $0.71     $0.94    ?o"o 

The  .sheet-ground  of  the  Joplin  di  .triot  is  :i  mineralized, 
fine-grained  chert,  averaging  about  S  ft.  in  thickness,  e\- 
treinelv  hard  and  re(iuiring  the  heaviest  type  of  machine- 
drills. 


INDEX 


Accounts      (mine),      card 

system    for )*<* 

African    Metals   Co 11!> 

Alaska   Mexican   mine ^.V! 

Alaska  rriadwill  nimc.'SIKJ,  .'ilW 

Aldrich    ticctnc    puiiip...  '!81 
A  in  f  n  d  i  n  K      Companies 

Bill    -JM 

Anu-ruan        Institute        of 

Mining    Engineers HO 

Amcini/ation 175,   221,  'J.l") 

Area  sloped  out  as  con- 
tract   basis 21 

Argall.    Philip 14 

"Cost    of    Chlorinating 

Cripple  Creek  Ores",  .'iot! 

"Cost  of    Mining" 'M2 

As.sociated        N  o  r  t  h  e  r  n 

Blocks    mine 'J<^3 

Bain,  H.  F.  "Mining  Costs 
at   Cripple   Creek" 154 

Baltic  Copper  mine,  card 
system  in  use  at 80 

Baltic   mine 96 

Bancroft,  Geo.  J.,  "Mine 
Efliiipment  and  Ore- 
Reserves"    227 

Barton,  Eugene  II..  "Min- 
ing and  Milling  in  the 
Mojave   Desert" l-IT 

Basis   of  value 300 

Bathurst.   F    H 275 

"Mine   Reserves" 339 

"Secret    Reserves" 206 


Meniamin,   F.dward   H 15 

Bingham.    L'tah 405 

Birch,   Stephen 320 

Black   Iliils,  S.  Dak 4o4 

Bookkeeping.      suggestions 

.IS  to  l.iliur-saving  in....  64 
HoiiMer  I'crsi'\erance.275.  2>'l 
Boulder       Perseverance 

Commission    338,  339 

Broad.    Wallace 202 

"Mining  in  Rhodesia".    167 

Brown.    Nicol 62 

Brown.   R.   G 257 

"Cost  of   Mining" 347 

"Cost  per  Ton  as  a 
Basis  of  Mine  Val- 
uation"        56 

"Gold  Mine  .\ccounts".     91 
"Mine    Equipment   and 

Ore- Reserves"    283 

"Some    Pumping 

Data"    378 

"Treatment  Capacity 
and    Ore-Reserves"..   217 

Brunswick   mine 378 

Bucyrus  dredges 3(!!» 

Burra    Burra  mine 4iil 

Butte,   Mont 407 

Calaveras    county.    Cal ....   404 
California,    g"ld     dredging 

in    268 

Calumet  &  Hecla  mine.  198,  401 
Card  sv'-'.^ms  for  mine  ac- 
counts     94.    80 


416 


ixnr.x 


Carter,  T.  Lane 10 

"Mini-  l.nlwir  and  Ci>sts 
"M     the     Witwatcrs- 

rand"   l.V) 

Cartcrvillv  Webb  City  dis- 

Tict    Ifi5 

Center  Star  mine ."ij 

Cd'iir    .1'  \l.iH-,    lil.ihd 4{)H 

Cole.    Will    C 8(( 

Colonial   Mines  Syndicate.   Ill 
Cotnmi.ssion,   Boulder   Per- 
severance       .(.'IS 

Commi-ision.    Rciyai L'Sl 

Compania         Metallurgica, 

Mexico    (;.} 

Companies    Acts 125 

Companies,  no-liability M') 

Comstock.  TIk'o.   B OJ.    f)  i 

"Card      Systems      for 
Mine   Accounts".  . .       'U 

"Mine    .Acrount.s" lij 

Consolidated    .Mini's   Selec- 
tion  Co 1  l;t 

Contract  basis — area  stopcil 

out    ■_>; 

Contract  system  m  mining,     i'.'! 

Cornish  pump  system .'Wl 

Cornucopia   mine I'MO 

Cosmopolitan   mine.  .  .  .l'I^.  .(."iD 
Cost  of  Chlorinating  Crip- 
ple Creek   Ores .'l.")t; 

Cost   of    Mining.  .:!■_':!.   .'l-Jt. 
:i:rt.   Ml.   347,   :i.-,n.   :!Tl'. 

384,   387 AifA 

Cost    of   mining   and    mill- 
ing       X,:> 

Cost  per  ton   as  a  basis  of 

mine    v.rhi  itiou ,',i; 

Costs,  dredging l'iIK 

Costs,  engineers'  estim.Ttcs.   •_'»;} 
Costs,     grave!     mining     m 
.Maska     and     Northwest 
Canada    317 


Costs,    mining,    ,it    Cripple 

Creek    103 

Cripple   Creek 406 

costs  at 246 

leasing  at 301 

mining  costs  at.  . .  .lo;t.  1,14 
mining   problems   at..  .   107 
ores,    cost    of    chlori- 
nating    :v,rt 

Cripple     Creek     and     Lake 
View  costs  contrasted...     48 

Crown    Reef   mine 244 

Curie,  J.   H 17,   77,  s7,  mi 

"Ore-Reserves  in  Gold 

Mines"   249 

Cyanidation       in       Rlunle- 

s'^i    117.  172 

f'.'l-v-   11    J 208 

K.irlmginii.  John 120 

O.iy's  work   define<l Jfi 

Hei-p    'iiining :\<){\ 

Deep    level    mines    on    the 

l<-"'d    235 

Del.iw.ire   &   Hudson   Co..   223 

I'enny.   (^.    A 02 

"l-'conomic     Ratio     of 

Treatment     Capacity 

to    Ore- Reserves",  ,  ,   232 

I'mny,   II.   S  ,  "Ore-hreak- 

mg   and    Sorting   on    the 

Rand"    tw 

nenton.    I"    \\'    y,( 

'■.\     Card     System     for 
.Mine    .Vecounts",  .,  ,     80 

Diehl    ;)ror"„,, 44 

i'ouglas   Island 40!) 

Dredges,    Bucyrus lifli) 

Dredging   at    Oroville 'Mu 

Dredging    costs 269 

Duckti.nvn,    Tenn 412 

I'A-onoinie  nilio  of  trc.-it- 
inint  capacity  to  ore- 
reserves    232 


INDEX 


417 


El  Oro  mine llii 

El  Oro  Mk.  &  Ry.  Co.  H'.  llti 
FnninctTs'       estimate       of 

costs    -1)4 

E<iuation,    personal '.'53 

E<|ui|)incnt      and      orc-re- 

servcs..lK't,  18-_'.  IH.',,  •J44. 

278  302 

Exploration    Co..    Ltd ll'i 

Extensions       of       mining 

plant,   payment  of Hs 

Finance,    mining,    another 

aspect  of 1!'" 

Finance,  mining,  some  a's- 
pccts    of.    liO,    ll"i.    IPi 

\\i2    125 

Finlay.  J.   R 1'.4,  1% 

"Cost  of  Mining".  .ti:! 

"Leasing     at      Cripple 

Creek"    '■i'>\ 

"Mining  Costs  at  Crip- 
ple   Crock" li':t 

Flnt   R)vir,   Mo 412 

FriiluT^   iiiiiiitig 185 

Frisco.    Utah 4oO 

Futures,   appraismg  of....     98 

Gardiur.  Frank 40 

Garth waite.    !■:.    II 170 

Gold   drtdginR   in    Califor- 
nia     2r>8 

Gold  Un.dgnig  at  Oroville.   2W 
Gold-mine  accounts. 34.  "in,     91 
Gold     mining     as     an     in- 
vestment         IT 

Gold  niiiiinK  in  Rlnuk'sia  l'i."p 
Gold     mines,     ore-reserves 

in    24!) 

Gold        mines.        valuation 

of    211.  Sih 

Golden  Cloud  mine 2.'iO 

Grant.     R.     J.,     "Cost     of 

Mining  and   Milling"....   ^.S!) 
Grass    Vallev.    Cal 404 


Great     Boulder     Persever- 
ance  mine 4o,     47 

Great      lioulder      Proprie- 
tary     281 

Great  Fingall  Con.  Mg.  Co.    40 
Guggenheim       Exploration 
Co     ,  .li:t,  115,  110,  117.  lis 

Hall.    R.   N 202 

Hamilton.    Richard 281 

ll.aiitnond.  John  Hays....   170 
lUr/.ig.  C.  S.,  "No-Liability 

Cnmp.iiiies"  260 

H'li.irt.    I",.    .\morti/ation.   221 
ll.ihl,    I,.   J.   "Urcdging  at 

Oroville"    .'!t!7 

Hoist  l>y  his  own  petard..   .'t(;4 

Homestake  mine   3u3 

Hoover.    II.   C,  5n.   .J3,  G2 

f»l.  ISl.  182.  1S7.  1S9.  194. 

19."..    197,     1119,    217.    221,  227 

"[•".cimfiiiic      Ratio     of 

Trcitiiu'iil      Capacity 

to    (.)re  Reserves".  ..    173 

"Gold        M  1  n  e        .\c- 

counts"    37 

"Ore- Reserves"    2.').5 

"Ore        Treatnitnt       at 

Kalgoorlie"    44 

"Valuation      of      Gol 

Mines"  211 

Hutchinson,   \V.    S,.    "Co>t 
of    Mining   Zinc    Ore    in 

the  Joplin   District" !tj0 

Humes.    James,     "Cost    of 

Mining"     3S4 

Iiiga.l-,    W     R IH',.  ■_'.•,- 

"Cost   of   Mining". 324.  4ii3 
"Economic      Ratio     of 
Treatnunt     Capacity 
to    l.)re-Reserves".  ,  .    194 
"Engineers'       Estimate 

of   Costs" 2*'i4 

"Mining  in   Missouri".  271 


•llt< 


IXDEX 


Ingersoll-Scrgcant        rock- 
(IrilN     ,  ,    ., 


:>ti 


Institute     of     M 


iiimi;     ami 


Met 


:illurKy 


Institution   nf   Mmmj^    1-ji- 
gincirs    


IM> 


111) 


Interval  Intwien  K\el-,.._   i*»'\ 


nvestment   ni   iiinics 


Inwoot''^'    tables 'HI.  .'(15 

Ivanhoe    mine.  .  .  .  : i&l 


Jenki 


Chn 


Miir.ng    Accoiint- 


Johaniuslnirg, 

methuils   at. 

Joplin,    Mo.  . . 


n;  I  n  1  n  g 


Joplin,   enst.s  at '-.'71 

Joplin      district,      cost      of 

nulling  zinc  ore  in ItiO 

Joplin    zinc  ores,   co^t   dia- 
gram   for 111;! 

KatTir.s  as  sorters 1_' 

Kalgoorlie,    ore    treatuieii; 

at    -l-l 

Kalgurii   mine    I'S.'f 

Kolar   di-tnct,    India J 11 

Lake   View  consols.  ...  I'Jl'.  2oS 
Lake     View     and     Cripple 

Creek   costs  e.mtrasted.       48 
Lake    \'iew   mill,    Kalgoor- 
lie.  trealment   costs  .it. .  .     ■}  1 

Lassen   Mining  Co l."> 

Lawrence,   Benj.    B.  . .  .  lIi),  'J."!."! 
"Mine   Equipment   and 

Ore. Reserves"    isn 

Loadville.    Col loT 

Leasing   at   Cripple    Creek,   :iiil 
Lee,  Chester  I".,  "N'otes  on 

Mine    Reports" .'!!i'_' 

I.e   Rni    mine IJJ 

Levels,  intervals  between..    Im) 

M.iin    Reef   Leader   mine.  .   L'4r) 


Mason   &    H.-rry 4'i 

Matabeleland.    inimng    in       Ifi? 

McDermott,    Walter IJO 

Mereur.    L'tah 406 

Milling  m    Rhodesja 17'2 

Mine    accounts (J2 

Mine,  appraising  the   value 

of   101 

Mine    equipment    and    ore- 

rcserve.s.  .  .l.'^T.    L-l),    l'l'7,  285 
.Mine    labor    and    costs    on 

the  Witwatersrand 1.50 

Mine  reports .398 

Mine  reports,  notes  on....   39'J 

-Mine    reserves .3;!9 

Mine   valuation .311,  313 

Mine  valuation  by  Govern- 
ment          ,',3 

Mines  Company,   Ltd 12() 

Mines    Development   Co...    112 

Mines,  investment  in 87 

Mines,     in\estigation     and 

management   of 2 

Mines,   operation   of 3 

Mines    Selection    Co 120 

.Mines,    valuation   of 5 

-Mining,    causes    of    failure 

111   1 

Mining,  co.st  of. ...'iJG,  324, 
:U:!.    342,    347,    3.-i0.    .372. 

.■W4,   3S7   403 

-Mining     costs     at     Crijiple 

Creek    1,54 

.Mining    costs,     gravel,     in 
.Maska     and     N'orthwest 

Canada    317 

.Milling,    deep ,390 

Mining   finance 129 

•Mining  finance,  another  as- 
pect  of 190 

Mining        and        Financial 

Trust    112,  120 

Mining  investment 77 


1 


IXDBX 


41l» 


1 


Mining  methods  at  Johan- 
nesburg           22 

Mining    and    nulling,    cost 

of    :r.9 

Mining  and  milling  in   the 

Mojave  desert !•"" 

Mining   in    Missouri '.'Ti 

Mining  in   Rhodesia   ..Itl",  Jiid 

Mining    risks 'JH 

Minmg,  secrecy   in ■ill!) 

J'issouri.    mining   in -'71 

Xiontreal  &   Boston 311 

Moreing,  C.   Algernon W 

Moss,    Frank    A -'S:i 

Mountain    CoppiT   Co 4'J 

Mysore  Gold   Mining  Co.  .     .'i'J 

Nicholson,  R.    B -'S2 

No-liability    companies...   I'tiii 
Notes   on    mine   reports...   .31)2 

Ore-breaking    and    sorting 

on  the   Rand 08 

Cre-drcssing.  assay  results 

as  a  guide  in 'il 

Ore-reserves    '2'>^ 

economic   limit  of l'^ 

economic        ratio       of 
treatment       capacity 

to    I'.Ti 

in   gold   mines '240 

and   mine  cquiprrent..  285 
and      treatment     capa- 
city    17:!,  194 

Ore   sorting 8 

Ore     treatment     at      Kal- 

goorlie    44 

Oroville,    dredging .307 

Oroville,  dredging  cost.  . .  .  201) 
Oro\ille,  gold  dredging  at.  28(1 
Oroya-Brownhill  mine. 4",  27t) 
Ouray,   Colo 4n7 

Palmer.  C.   S.,  "Etiuipment 
and  Ore-Reserves" 3(12 


IVrsonal   cfiitatinn,   the....  2ij.'t 

I'lttsburg   Coal    Co 22-'! 

Portland  Gold  Mining  Co.  2.'i0 

Portland    mine XV.i 

Promoters,    swindling 12t) 

Pump,  Aldrich  electric...  381 

Cornish   system 381 

Pumping  data,  some ,378 

Puringtnn,  C.   W'..   "Gravel 
Mining   Costs   in    Alaska 

and  Xcirthwest  Canada".  .317 

Rand.      ore-breaking      and 

sorting    on OS 

Rand,  unemployed  labor  on   1."j2 
Rand,  value  of  mines  on.  .     2'' 

Randsburg,  Cal 4ii4 

Reading  Co 223 

Ready   Bullion   mine 33.") 

Red        Mountain,        Colo., 

mines    12ii,  124 

Reserves,    mine 3311 

Reserves,    secre*.2i'.j,    2o0. 

27.-)    281 

Resuing,    explained !) 

Resiling     in      underground 

work     131 

Rhodesia.      ancient      mine 

workings    in 109 

gold  mining  in 13.'i 

gold  production  in....    149 

mining   m Iti7.  2(iO 

mining,     working     ex- 
penses        145 

Rickard,   T.    A 2,30 

".Xppraising   Fntun^".     9>< 

"Basis   of   Value" 3oo 

"Cost   of   Mining"  .323.  .387 

"Dcep    Mining" 390 

Equipment  and  Ore- 
Reserves"  .  .180.  182. 
185,  187,  189.  '244. 
248    278 


:ick;ir.!.  T.  A.,  ■Col,!  Mi 
ing  ris   an    Iin  f.t;iii'ii!' 


•II 


(li^t    bv     111 


C)v 


Fotard" 


/\ 


.!i;i 


'lute 


ik     bet 


H-'VClS  llHI 

"  I  n  V  (•  s  t  111  cut       I  n 

Mines"    ,s7 

"Mine    Reports" Hits 

"Mine    Valuation" :U  1 

"Mine     Valuatuin     by 

Government"    ."ri 

"Mining   In\  estnient". .      77 

"Mining    Ri^k>" 'JO 

"Ore    Sorting" M 

"Sicnt  Reserves"   :2'>'i, 

l!7-')    -y^l 

"Secrecy  in   Minnig"..   3n|l 
"Some  A-jHCts  of  Min- 
ing      Fniance".  .110, 

11".    ll:»,    iL'J iL'.-i 

"Tlie     iV'rsnnal    Equa- 
tion"         L':,;i 

"\'aluati'in  of  Mine.-".       'i 
R'.x.  E.  A :rs 

RolHTt.S.     F.     C Ih7 

"Cost  of  MiniiiL;" .1.'. 

"Gold   Mir.irt;   in    ]\lio- 

desia"  i:i.-, 

"Mir.ing  in  Rlio.lesia".  l^'O 
"Resiling     ii       rnder 

ground   Work"    1:!1 

Roberts.  G.   M i^:! 

R-.(k-dri!Is.    1  nge  rsoll- 

Sergeant     ;W(; 

Rock-drilling  on  the  Rand.  l.">_> 

Roodefort    L'niied   iiiinc..  Inn 

Rossland.    n.   C tl'i 

Royal    Commission 281 

Secret   reserves. .  .■_'7.j,   281.  -JSi! 

Secrecy   in    mining Unit 

Shaft    sinl;uiu   by   hand.  . .  .      l."i 


DUX 

Sloss-Shcffield    Co 22;! 

Sinnli,    llanniton 112,  117 

Smith.   Howard   1).,  and   1£. 
W.        Steblmis.        "Gold 
Dredging   at    Oroville"..   2.-'i» 
Sonnig  at  Jolianne.-burg. .     M 

South    Reef   mine 21.") 

SjiiNhnry.    F.,    G 1!)4,  2.Vi 

"Mine    rj|nipnient    and 

Ore-Re-erves"    187 

St.    Frangoi.-   county,    Mo.. 

costs    ■J72 

Stamp-niil!s   in    Rliodcsia.  .    1-10 
Stebbins  &  Smith.  "Dredg- 
ing Costs"   200 

Stevenson.     R(;liert.     'A'al- 

uation  of  Gold  Mines"..  225 
Stratton.  \V.  S.  estate....  22!' 
Sinter  Creek.  Cal In} 

'1  asniania   g  .Id   mine 110 

'l'a>;or.   .b.lni.   &   Sons,  /-i'.l   112 
T.iy-.    K.    .\.    11.,    "Cost   of 

Mining"    372 

Telluride,    Col 4ii7 

Tomboy  Gold  Mines.   Ltd.     40 
Treatment      capacity      and 

ore-reserves    172,  217 

TweUetrees.    W,    11 98 

I'nion    iron    Co 224 

I'niteil        Slates        Mineral 
Code    1.39 

X'.ilnation   of  gr)ld   mines.  . 

211.  225 

X'.i'uation  of   mine .'il  1.  .'113 

\'aliiation  of  mines  Iiy   the 

cost  per  ton h6 

X'aluation      of     mines      by 

Government       TiS 

X'alue,  ba-is  of 300 


INDI-X 


IJI 


\'ictonan    Companies   Act 

■JiiT,  :!Hi 

W..  F,.  H..  "Mine  Valua- 
tion"        311! 

Walker,  Edward,  "The 
Paynient  of  F,xtensions 
of  Mining  Plant  out  of 
Revenue"    'ii^ 

Wanderer  mine.  Khoik- 
sia 11-! 

Wankie   coal-field l-'t! 

War  Eagle  mine W 

Waring  &  Son '''t) 

Warin;'.  W.  Geo.,  "Notes 
(^n   Zinc   Mininc;" ''>* 

West       Australian       mine- 
owners,  coum  il  of .  . .  ,      "i-i 

Western    Australia,   costs..   2-iC< 

Witwatersrand    1'^ 


Witwalersand.  costs  at....  l"i'> 

Witwatersrand    nnnes ti'J 

Williams.  Percy.  "The  Val- 
uation  of   Mines" 1 

Work   (day's)    defined '26 

Vale.  C.  G.,  "Gold  Dredg- 
ing in   California" 26S 

Vellow  Aster  Mining  & 
Milling   Co 157 

Zinc  concen'.r.ite.  weight 
and   volume  of '29 

Zinc  minerals.  specific 
fjravity  and  composi- 
tion  of 31 

Zinc  mining  notes '28 

Zinc  ore  in  the  Joplin  dis- 
trict, cost  of  inining !t'>'^ 

Zinc  ores,  valuation  of....     28 


